KARACHI, May 17: Textile Ministry has asked the Central Board of Revenue (CBR) to give 6 per cent compensatory rebate on export of leather garments as allowed by the Economic Coordination Committee of the cabinet on the export of textile garments.

Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA) Chairman Fawad Ijaz Khan in a recent meeting with Minister for Textiles Mushtaq Cheema had requested for this concession. The PLGMEA chief had also taken up the issue with the prime minister and commerce minister for giving compensatory rebate on export of leather garments.

In a statement issued here on Tuesday, the PLGMEA chief said that the government had already granted freight subsidy on export of leather garments for the year 2005.

“The impact of this subsidy comes to around one per cent of FOB value and that is why PLGMEA has requested 5 per cent compensatory rebate instead of 6 per cent allowed to textile garments exports,” he said.

He further said that this incentive had been requested to provide level-playing field to our exporters of leather garments as compared to our competitors from China. “The cost of manufacturing is much lower in China than Pakistan and their government has offered several incentives to exporters for capturing the international market”, he added.

He said that the exports of leather garments had been showing positive trend with the announcement of freight subsidy since January 2005. There was 28 per cent decline in exports of leather garments for the period July-Dec 2004 as compared to corresponding period of preceding year.