KARACHI, Oct 17: Exporters are seeking further amendment in the Duty and Tax Remission for Export (DTRE) rules and strongly feel that without removing lacunas from these rules the scheme could not be implemented.

It is being strongly argued by the exporters that the amended DTRE rules are still deficient in a mechanism which could ensure full payment of duty drawback on their local input costs.

They further said that the amended DTRE rules did allow an exporter to get exemption from sales tax or duty at the import stage on temporary imports for exports that were claimed at the export stage. But these rules do not fully compensate an exporter against the duty paid by him at the import stage.

Citing an example, Pakistan Readymade Garments Exporters Association (PRGMEA) chairman Tahir Aziz told Dawn that if an exporter imported fabric and applied for sales tax exemption and paid import duty, he would get duty drawback at much lesser the rate of duty deducted at the import stage.

Similarly, he says if an exporter gets an exemption from sales tax and duty at the import stage, he will be entitled to claim duty drawback on his local input costs incurred by him in different ways, including processing, dyeing and printing as well as use of imported chemicals.

Tahir Aziz further said that a large number of accessories such as zippers, labels, and buttons were imported by an exporter and if he sought exemption from sales tax and duty at the import stage, he would not be entitled for duty drawback.

“It is not the question what we get as exporters, but the most important point is if our exports are costlier even by a percentage point in the free market era starting from January 1, 2005, our products will be out of world market as they will be facing tough competition from other countries.”

Abdul Wahid Bandukda, chairman, PRGMEA Sales Tax Committee, said that in the present shape, the DTRE rules were favourable for vertical and composite units or those where are only importers.

He said because of major flaws in the rules so far only 350 units had registered themselves under the amended DTRE rules. However, Mr Bandukda said the scheme was good provided the government removed the lacunas and some of the flaws from the scheme.