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Duty drawback claims piling up due to lack of funds - PLGMEA
Jan '09
Mr. Fawad Ijaz Khan Chairman Pakistan Leather Garment Manufacturers & Exporters Association (PLGMEA) stated that funds amounting to millions of Rupees are stuck up with Customs & Sales Tax Collectorates since last several months. Mr. Fawad stated that there has been no payment of Duty Drawback from the Karachi Collectorate since last one month.

Lot of Duty Drawback claims of Leather Garment Exporters are already processed but due to lack of funds the cheques are not being issued by Karachi Export Collectorate. Similarly the Sales Tax refunds of Exporters are also not being paid from the Sales Tax Collectorate Karachi. The situation is much worse for Sialkot based Leather Garment Exporters. There has been no refund of Sales Tax since last three months from the Sales Tax Collectorate Gujranwala.

Mr. Fawad stated that all these refund payments are withheld by the Government so that the Net Revenues of FBR can be increased. The members of PLGMEA have met Mr. Ahmed Waqar, Chairman FBR and apprised him of huge amount of refunds of Leather Garment Exporters blocked with FBR. PLGMEA is also in contact with the Customs & Sales Tax Collectorates in Karachi but still the Exporters refund payments are not being released.

Mr. Fawad stated that because of Global Recession the retail sales of Leather Garment in Europe and North America are about 30% down as compared to last year and therefore the Leather Garment Exporters are not receiving repeat orders from their Customers which is resulting in loss of Exports and causing liquidity crisis.

The Leather Garment Export which were showing 4% growth from July – Oct 2008 over July – Oct 2007 have sharply declined during November 2008 by 35% over November 2007. The Exports of Leather Garments during July – November 2008 have declined by about 8% to US$ 198 million from US$ 215 million during July – November 2007.

Mr. Fawad urged the FBR Chairman to urgently look into this matter of grave concern for exporters and issue instructions for expediting the release of stuck up refunds with the Customs & Sales Tax Collectorates.

Pakistan Leather Garment Manufacturers & Exporters Association

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