KARACHI, May 31: The chairman Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA), Fawad Ijaz Khan has reiterated his demand for giving six per cent Research and Development support to the leather garment exporters. In budget proposals 2005-06, the PLGMEA pointed out that leather garment industry had been facing several problems for the last three years. The proposals were aimed at averting threats in the international markets, especially from low-priced Chinese exports.

PLGMEA has emphasized the need for measures to reduce production cost and enable leather garment exporters to compete effectively in the world market. He said that high cost of production and R&D were the main hurdle to boosting exports. Exporters, he said, were finding it difficult to compete with low-cost Chinese goods. The future of leather garment industry was on product differentiation and not price differentiation.

Mr Fawad urged the CBR to withdraw sales tax SRO 415(I)/2005 dated May 12, 2005, disallowing sales tax refund on stocks held by exporters. He said that this was very harsh condition and would create liquidity problem for exporters. Exporters, he said normally purchase goods at one time and consume them in subsequent months. Denying the sales tax refund on stocks would further compound the hardship of exporters, he added.

He suggested that plant and machinery as well as spare parts should be exempted from import duty. PLGMEA demanded blanket permission of 5 per cent of last year export performance should be given to leather garment exporters for importing accessories used in leather garment production.

India has allowed this facility to its exporters in their Trade Policy last year. Exporters have to face several hassles in import of these accessories. It is essential that for improving the quality of our products a blanket permission of 5 per cent is granted for importing accessories.