KARACHI, July 28: The Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) has criticized slashing of duty drawback rates on export products without taking stakeholders into confidence.
In a statement issued on Wednesday, PLGMEA chairman Fawad Ijaz Khan said in the past it was the practice of the CBR to involve the respective trade associations whenever it planned to revise duty drawback rates and a minimum period of three months was given for the implementation of new rates.
This is for the first time, he said, the CBR took the unilateral decision on a summary sent from the Input-Output Co-efficient Organization (IOCO), Karachi, for slashing duty drawback on all export products, including leather garments.
He further said that many exporters of leather garments normally imported huge stock of dyes and chemicals at one time for processing of leather for the next six to nine months.
"Consequently, large stocks of chemicals imported in January this year will be consumed from July to September. These exporters will be at great disadvantage due to sudden reduction of duty drawback rates," he added.
He said the PLGMEA was already not satisfied with the current duty drawback rates on export of leather garments. He said member exports (CBR) had assured the association in a meeting held on June 23 this year that fresh survey of leather garment industry would be conducted by the IOCO to revise the duty drawback rates on export of leather garments.
Contrary to these facts, Mr Khan said the CBR was planning to slash the present duty drawback rates on export of leather garments unilaterally instead of directing the IOCO to conduct fresh survey of leather garment exporters.
He said the leather products sector had shown some sign of improvement in exports that increased slightly by four per cent during 2003-04 to $403 million compared to $386 million in 2002-03. The PLGMEA chief cautioned that the cut in duty drawback rates on export of leather garments would have negative impact on leather garment exports.
Our staff reporter adds from Lahore: The Pakistan Hosiery Manufacturers Association (PHMA) has expressed its concern over the reduction in duty drawback rate on export of knitwear products through SRO No 641(I)/2004.
In a statement issued here on Wednesday, PHMA chairman Mohammad Amjad Khawaja said this would deal a big blow to the industry which was already hit badly by internal and external pressures.
"After the 9/11 incident, the knitwear industry is struggling for survival. Instead of offering support to the industry, the government has slashed the already low drawback rate," the statement said.
Mr Khawaja said exporters were the "earning hands" of the economy and they should be provided with every possible assistance. He urged the President, the Prime Minister and the Minister of Commerce to intervene and rescue the knitwear industry.
He also said apparel/knitwear was the highest value-added product in the textile sector and it should be saved from adverse effects of the fiscal policies. He demanded that a meeting of the stakeholders should be convened to discuss the situation and implications of reduction in duty drawback in the wake of the post-quota scenario.
He said Pakistan's competitors - India, China and Bangladesh - were giving high duty drawback and providing other supporting measures to their exporters. "As such, our government should also realize the demand of prevailing hard competition in the world market."
He further said the industry was facing severe competition in the international markets, hence the government policies should help exporters instead of putting them in hot waters.