KARACHI, May 9: Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) is seeking relief from the government in the forthcoming budget to arrest the falling exports in leather garments.

The proposals forwarded to the ministry of finance has urged the CBR to withdraw sales tax on raw hides, skins, wet blue and crust leather. Alternatively, rate of sales tax on all types of hides, skins and leathers should be reduced to 5 per cent.

The PLGMEA pointed out that duty drawback rates on leather garments were revised from October 2002, whereas the association had been demanding that they should be applied retrospectively from July 2002. It has also requested to enhance the existing duty drawback rates on export of leather garments.

In the budget 2003-2004 proposals, the PLGMEA is also seeking amendment in Section 73 of Sales Tax Act 1990, and condition of supplier payment within 120 days should be abolished for exporters.

Similarly, the association disapproves of multiple audits of registered units with sales tax as it overburdens the work and sometimes results in harassment of these units. PLGMEA is also against spot checks of stocks of registered units because they submit their stock position on computer disks.

Excise duty of 16.38 per cent imposed in the last budget on import of chemicals is being demanded to be abolished or some mechanism be devised for its refund. The association which was established recently also feels that GST on telephone bills should be adjustable as was the case with other utilities.

Like other types of leathers there should be no customs duty on import of finished leather with wool and withholding income tax of 0.75 per cent being charged on export proceeds should be withdrawn from leather garment exporters for a period of two years to pull the industry from present crisis.

It also demanded one window operation for various labour levies be implemented and an appropriate percentage of these levies may be fixed to minimize discretionary application of these taxes by field staff.

PLGMEA has suggested that rates of utility bills of electricity, gas and telephone should be brought down to reduce the cost of leather garments and made-ups and help to keep them competitive in the world market.