KARACHI, July 6: The Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) has urged the government to allow temporary import of fur trimmings that is used as decoration in leather garments.

The association in its proposals for the trade policy 2004-05 has proposed to the commerce ministry to lift the ban on import of fur for boosting exports of leather garments.

Pakistan Leather Garments Manufacturers and Exporters Association chairman Fawad Ijaz Khan said that there was a considerable demand for leather garments with fur trimmings. Similarly, import of shearling leather, which is finished leather with wool (HS Code 4302.1300), should also be allowed duty-free.

At present the government has levied a five per cent import duty on shearling leather whereas other finished leathers are exempted from this duty. Mr Fawad highlighted the issue of temporary importation of accessories for export.

He suggested that a blanket permission of five per cent on last year's export should be given to the exporters for importing accessories used in the production of leather garments. SRO 410 for temporary importation should continue after December 31, 2004, since the DTRE scheme is not feasible for most exporters.

"Temporary imports under manufacturing bond 450(I)/2001 should be exempted from withholding tax as previously allowed under SRO 1140(I)/1997. The government should also allow re-export of temporarily imported goods supplied by buyers without sight letter of credit or advance payment if supplied as free of cost."

The PLGMEA chief said some foreign customers or exporters brought accessories with them as accompanied baggage for urgent shipments. "These goods as accompanied baggage, although in commercial quantity, should be released promptly after payment of necessary duties."

He further raised the issue of import/export of samples of leather garments. The restriction of 50 samples of leather garments per year is insufficient and limits the development of new export markets, which are captured after extensive sampling.

Mr Fawad suggested that the quantitative or monetary ceiling on leather garment samples should be withdrawn and exporters should be allowed to send samples freely. "Many foreign customers send their samples of leather garments for orders.

No customs duty should be charged and no quantitative restriction should be imposed on import of such samples." "The system of Export Development Fund (EDF) should be restricted according to nature of product exported and the exporting associations should know before the start of the financial year about how much funds are allocated to them out of EDF so that they can plan their trade promotional activities."

Mr Fawad recommended that exports should be classified as raw materials, intermediary goods and end products. Cotton, yarn, agricultural produce, etc., should be categorized as raw materials.