The Pakistani leather garment industry has urged the government to exempt all other export sectors from the new Reformed General Sales Tax (RGST) instead of only the textile sector.

Mr Fawad Ijaz Khan, chairman of the Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) has appealed to the government to include all five export sectors in the list of sectors exempted from the RGST, instead of granting exemption only to the textile sector.

Mr Fawad urged the government not to make this discriminatory decision and stated that all the previously exempted zero-rated exporting sectors should be treated equally. He stated that the associations of the other zero-rated export sectors are united against the imposition of RGST. Mr Fawad further said that all the associations in the leather sector also unanimously demand RGST exemption for the leather sector. He suggested that if the industry is not provided exemption, it will suffer tremendously since their funds amounting to approximately $46.6 million will be blocked in sales tax refunds for an average six month period. There would be widespread corruption also which will cause further delay in the refund process.

Mr Fawad advised the government to impose RGST on all five export sectors only at the retail stage.

Mr Fawad has stated in a press release that he has also talked with Mr Shahnaz Wazir Ali, chairman of the National Assembly Standing Committee on Finance and Revenue and its member Ms Kashmala Tariq, and requested them to recommend that all five export sectors should continue to be zero-rated under the new RGST scheme instead of only the textile sector.

It may be mentioned here that the Pakistani government, reportedly under the advice of the International Monitory Fund (IMF), wanted to introduce the newly reformed GST from 1 July 2010 in the country to get a loan from a doner agency. But later on objection from opposition parties and various industries, it delayed the imposition until November 2010.

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