Commerce Ministry has notified Research and Development (R&D) support to textile garment exporters, at the rate of 6 percent of FOB value of exports, with effect from April 12, 2005 An SRO, No 437(1)/2005, issued by the Ministry on May 18, 2005, said that to encourage R&D in garments sector, and to allow and regulate R&D support to textile garment units, the Federal Government would provide, from April 12, 2005 and until further order, R&D support to textile garment units, manufacturing and exporting textile garments, falling under Chapters 61 and 62 of Pakistan Customs Tariff (PCT), at the rate of 6 percent of FOB value of exports, subject to certain conditions.
The exporting unit must be a member of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), Pakistan Hosiery Manufacturers Association (PHMA), Pakistan Knitwear and Sweater Exporters Association (PAKSEA) or Pakistan Cotton Fashion Apparel Manufacturers and Exporters Association (PCFAMEA).
The exporting units will spend the amount, received as R&D support from the federal government, on activities including product development, skill development and training, upgradation of information technology and professional consultancy.
The expenditure on the activities shall be reflected in the annual accounts and balance sheet of the exporting unit which shall lodge its claim for R&D Support payment with the field offices of State Bank of Pakistan (SBP) Banking Services Corporation, through authorised dealers, on the prescribed form, duly supported by documents, within 30 days of the realisation of export proceeds.
The Order provides that certification for R&D carried out by the exporter shall be received from the concerned association on the specified form. Before verifying the claim the relevant association shall carry out due diligence to ensure that the claim of the exporter is based on facts.
The claim for exports to African and Gulf countries shall be more minutely scrutinised.
The admissible R&D support payment, as approved by the field office of SBP Banking Service Corporation, shall be made by crediting the account of the concerned authorised dealer, who shall pay the amount to the exporter within 24 hours of the receipt of credit in his account.
To avoid delay or rejection of the R&D support claim, the authorised dealer, at the time of certification of the ''''E'''' Form, shall see that the description of the commodity is properly given in the ''''E'''' Form, and the invoices are in accordance with the nomenclature given in Chapters 61 and 62 of the PCT.
The Order provides that in case the exporter''''s consignment includes items other than falling in the said Chapters of PCT, a separate ''''E'''' Form and Shipping Bill will be made for such items and commodities.
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