KARACHI, Aug 21: Pakistan Leather Garments Manufacturers and Exporters Association (Plgmea) has criticised the decision of the Central Board of Revenue to reduce duty drawback rates on export of leather garments to 3.22 per cent.

In a statement here on Monday, Plgmea Chairman Ahmed Zulfiqar Hayat said the Input Output Co-efficient Organization (IOCO) of customs had unilaterally prepared the worksheet without consulting or sharing information with Plgmea.

He said the IOCO had also ignored the agreed parameters of duty drawback calculations and appropriate input recipes because if these were followed and 2006-07 budget duty reductions were taken into consideration, the duty drawback rate on export of leather garments would not have been reduced significantly.

Mr Hayat said further that as per previous practice, had the IOCO consulted the trade bodies before incorporating variations in duties according to the budgetary announcements, there would have been no significant change in the customs duties on inputs of leather garments and there would have been no justification for 37.18 per cent reduction in duty drawback rate from 5.17 per cent to 3.22 per cent.

He said the garment industry was currently going through a crisis and several units had closed down, rendering thousands of workers jobless. There was no incentive for this high value-added and labour-intensive industry in the trade policy 2006-07, he added.

This unjust decision of the CBR to reduce duty drawback rates, he said, was a `killing decision’ that would lead to a widespread closure of factories of leather garments and hundreds of thousands of workers would lose their jobs in this industry.

Mr Hayat urged the CBR and the ministry of commerce to immediately intervene in the matter and ask the IOCO to discuss the worksheet on DDB for leather garments with Plgmea till such time the operation of SRO838(I)/2006 should be suspended.