KARACHI, May 21: Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) has urged the government to frame such policies in the forthcoming budget which could help Pakistani products to compete effectively in the world market.
In the budget proposals 2004-05, the PLGMEA stressed upon the need to bring down the cost of production by removing some taxes and duties imposed by the government on raw materials.
"We need to face the threat in the world market, especially from low-priced Chinese exports by reducing the input cost of raw materials," PLGMEA demanded. The Association pointed out that excise duty of 16.38 per cent imposed on imported chemicals in the budget 2002-03, was not being refunded to exporters which becomes an extra burden on cost of production.
The PLGMEA demanded that the excise duty on chemicals be removed or some mechanism of refund be evolved so that extra cost being borne by exporters was reduced and make them competitive in the world market.
It demanded that all types of imported leather should be exempted from sales tax and customs duty to facilitate availability of good quality leather for value-added industries.
Citing an example the association said that shearling leather which is double faced leather has 5 per cent import duty. There is considerable scope in international markets for garments made from this type of leather.
Similarly, PLGMEA wants that raw skins and wet blue leather from local sources be exempted from sales tax as was the case with cotton and phutti to encourage development of value-added sector of leather industry.
It asked the government to further extend SRO 410 beyond June 30, 2004, since the DTRE Rules are not yet streamlined and most of exporters find these rules not feasible. Unless bottlenecks in DTRE rules are not removed SRO 410 should be re-validated.
Among other proposals for the budget included reduction in utilities charges for export industries to enable them to compete effectively in the world market. It pointed out that presently GST on telephone is not refundable, therefore, it should be made refundable as was the case with other utilities.
Furthermore, exporters are presently confronting multiple agencies collecting labour levies requiring multitude of reporting and audits which promotes corruption. PLGMEA demanded that for collecting various levies, federal or provincial one window facility be introduced and be charged at fixed percentage of exports.