Pakistan Tanners Association (PTA) has demanded of the Federal Ministry of Commerce to restore drawback of local taxes and levies (DLTL) on finished leather that was withdrawn vide SRO 711 (1) 2018 on June 08, 2018. Talking to Business Recorder, PTA Chairman Central Agha Saiddain said that the government had allowed refunds of local taxes, duties, and levies under DLTL Scheme vide SRO 62(1)2017 dated Dec 14, 2017 which had positive impact the country's exports.
Despite several meeting with the secretary commerce who had promised that that DLTL on finished leather would be continued as per earlier SRO 62(1)2017 dated Dec 14, 2017, no decision has been taken on this account and matter is still pending with the ministry, he regretted.
He further said that the previous government proved very cruel in this area. Payment of all sales tax and Customs duty refunds were stopped and this caused liquidity crunch for the industry and as many of our units were forced to close their operations. Though, the present government has resolved the issue regarding sales tax refunds but problems relating to Customs duty refunds still intact, he maintained.
PTA chairman also urged the ministry to allow the exporters duty drawback as per three years survey by IOCO. FBR had unilaterally reduced duty drawback rates under SRO 923(1) 215 dated Sept 8, 2015 finalized by IOCO. He said that the duty drawback as per IOCO working should be implemented with retrospective effect. He said the commerce minister of the previous government had announced 75 percent subsidy on international lab testing but SRO in this regard has not yet been issued.
Agha pointed out that due to war on terror many airlines stopped their operations in Pakistan and vassals to Karachi Port while their insurance cost increased for Pakistan. Moreover, many countries issued no travel advice to Pakistan due to which local enterprises could not get joint ventures with their foreign counterparts. Now the position has been totally changed and country's image is improving with every passing day. The departments concerned should highlight the changing scenario internationally so that the adverse impact of war on terror could be dispelled.
About 80 percent of the export of finished leather are from individual tanneries located out of clusters and need individual treatment plants for LWG certification. After STPF 2009-12 there is no government support to set up treatment plants in tanneries, he said and added that either matching grant should be allowed for setting up of treatment plants or expenditures on this account could be adjusted against the payment of export development surcharge (EDS) that is deducted at 0.25 percent on each consignment.
He was of the view that the Trade and Development Authority of Pakistan (TDAP) should be directed to remove the condition of 5-year so as enable the exporters to become eligible for subsidy to attend international fairs. TDAP has already agreed on this point and decision was kept pending for the board meeting, he said and stressed the need for early holding of the meeting.
With a view to enhance leather sector exports, the PTA chief suggested to the government to remove quarantine requirement for import of raw, wetblue, and finished leather under SRO 1067(1) 2017 dated Oct 20, 2017.
He also stressed the need for withdrawal of additional regulatory duty imposed on import of various basic chemicals under SRO 1035(1) 2017 dated Oct 16, 2017 and SRO 06 (1) 2018 Jan 03, 2018. He also urged the government to allow import of stamping foils/lamination duty free as it was allowed under Finance Act 2017 but in mini budget announced on Jan 23, 2019, 11-percemt duty has been imposed on import of these items which is a big setback to tanneries producing high fashion leather.
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