ISLAMABAD, Aug 26: The ministry of commerce on Saturday issued procedures for the payment of six per cent research and development (R&D) subsidy to the leather footwear sector.

The subsidy would be available to leather footwear units retrospectively from July 17, 2006 to encourage research and development in the sector and make it competitive with China and Vietnam.

The ministry issued a notification SRO871 of 2006, envisaging a set of procedures and conditions for availing of the facility by the footwear units manufacturing and exporting leather footwear.In case any fraud was detected in claiming the R&D, the vice-chairman of the Export Promotion Bureau (EPB will be the competent authority to levy fines and penalty up to 300 per cent of the fraudulently claimed amount. The appellate authority in this case will be the secretary commerce, while the association will file monthly statement with the commerce ministry giving details of export consignments.

According to the conditions, the exporting unit shall be a member of the Pakistan Footwear Manufacturers Association (PFMA) registered with the Director Trade Organisations (DTO), ministry of commerce; the exporting units shall spend the amount received as R&D from the government on the following activities: Product development, skill development and training, upgradation of information technology, and professional consultancy.

Exporting unit shall lodge its claims for the R&D support payment with field offices of the SBP-Banking Services Corporation through their authorised dealers in the form as set out in annexure-I to the notification duly supported by the documents as mentioned therein within 90 days of the date of realisation of export proceeds; certification for R&D carried out by the exporters shall be received from the PFMA in the form as set out in annexure-IV to this order.

Before submitting the claims, the authorised dealers shall scrutinise the application carefully and submit the same duly certified by them as an undertaking in the form as set out in annexure-II to this order, to the field offices of the SBP-Banking Services Corporation.

Such applications admissible R&D payment as approved by the field office of the SBP-Banking Services Corporation shall be made by crediting the account of the concerned authorised dealer, who shall pay the amount to the exporters within 24 hours of receipt of credit in their account.

In order to avoid delay or rejection of the R&D claim, the authorised dealers at the time of certification of the E-Form shall see that the description of the commodity is properly given in the E-Form and the invoices are in accordance with the nomenclature given in chapter 64 of the Pakistan Customs Tariff. The authorized dealers while forwarding applications for the payment of R&D support shall invariably and prominently rubber stamp at the top of the triplicate copy of the relevant E-Form.