Exporters of value-added textile products have warned the Central Board of Revenue (CBR) that if SRO 554, which allows duty-free import of machinery for export-oriented projects, was rescinded in the new budget, new export projects would not be coming.
Shabir Ahmed, founder Chairman of Pakistan Bedwear Exporters Association (PBEA), said that the proposed elimination of the concessionary SRO negated the declared government policy to encourage the export sector to modernise and expand to avail the free trade opportunities created by the WTO regime from January 1, 2005.
He said that in case the said SRO was withdrawn exporters would be compelled to pay huge duties on import of machinery leading to huge escalation in costs of setting up projects meant for export. Such action would weaken exporters' strength to compete in the WTO regime as well harm the country's export income.
The PBEA leader said that many projects in the bed wear, garment and processing industry that are in the pipeline and for which letters of credit have been opened and contract for machinery supplies have been signed, would become unviable if SRO 554 is rescinded.
Shabir pointed out that some manufacturers misused the SRO by selling the duty-free machinery in the local market.
Now the same lobby is trying to negotiate with the CBR to save them from penalties using All Pakistan Textile Mills Association (APTMA) for the bail out scheme at the cost that the association would accept the rescinding of SRO 554 by the CBR.