PRGMEA opposes RD on yarn importOctober 18, 2015
KARACHI: The Chairman Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) (S.Z), Irfan Ali has strongly opposed the slapping of 10 per cent regulatory duty on import of cotton yarn.
While reacting over the government’s decision to impose 10 per cent regulatory duty on cotton yarn from India, he said that it would be death warrant for the value-added textile industry as exports are already declining fast and in case of additional input cost, it would be a death warrant for the most important foreign exchange earning sector. He appealed the government not to make any decision in isolation or just meeting the demands of APTMA.
He further demanded of the government to reimburse refund claims to the tune of Rs12 billion of garments exporters have remained stuck with the government against DLTL (drawbacks on local taxes and levies), sales tax and duty drawbacks.
In a SOS to the Prime Minister, Finance Minister and Chairman FBR Irfan said that despite being the largest exporting industry and highest employment provider, the garment exporters were facing multiple issues with the government. First and foremost is the issue of pending DLTL claims jeopardizing the key initiatives of the Textile Policy and Trade Policy. Currently about Rs12 billion of exporters’ claims are pending with the government but none of the authorities concerned have issued a single penny despite an outlay in the current budget.
Irfan said that PRGMEA officials had met with member Sales Tax and Customs, Federal Board of Revenue several times but to no avail. Irfan pointed out that instead of resolving of energy crisis, exporters are being constantly bogged down in meaningless administrative procedures, which divert our attention from our main activity- exports. The government should play a role of business facilitator instead of a regulator, he said.
“The government should provide level-playing field by reducing gas and power supply to the industry to help exporters cut their energy costs and release billions of rupees stuck in sales tax refunds,” he said adding that due to gas shortages, mills cannot process our fabric in time and the sewing units simply cannot guarantee on time deliveries of export shipments. With this productivity level we cannot compete with Bangladesh let alone India or China.”
Irfan said that government was anticipating enhancing country’s exports by $1 billion annually following getting GSP plus status. However, things moved in opposite direction, as exports plunged in last several months mainly due to the ongoing energy shortage. The country’s overall exports have shrunk by 6.86 percent in July-October to $7.98 billion from $8.56 billion of the corresponding period last year.