Al Amin :
The country’s apparel exporters have urged the government to reset the maximum wastage rate in producing garment items.
They said that the new wastage ceiling rates have been set without taking the reality into consideration and it will increase complexities, rather than solving problemmes.
In the face of objections from the apparel producers, the Commerce Ministry on Sunday set the maximum wastage rates– 27 per cent for basic items, 30 per cent for specialised items and 4 per cent for sweaters and socks.
The new wastage rate will encourage fabric import and will damage the backward linkage industry, the stakeholders said.
In a letter sent to the Commerce Ministry on Tuesday, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said the new wastage rates have been fixed impractically and are not acceptable to us as the actual wastages are higher than the ratio.
“So, we demand for re-fixation of the wastage ceiling rate considering the reality of the sector,” the letter said.
In January this year, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the BKMEA sent a proposal to the commerce ministry to increase the maximum wastage rate to 40 per cent.
BKMEA Executive President Mohammad Hatem told The New Nation, “The wastage rates have been set without considering the reality. It will increase complexities, rather than solving problems. We do not accept the wastage rates.””The actual wastage in factories is much higher than the prescribed rate. If the wastage rate was set at 35 per cent, we would accept the decision,” he said on Tuesday.
According to stakeholders, if the production wastage rate of an export-oriented apparel manufacturers – who enjoy duty-free facility for raw material imports – is less than the prescribed rate, they sell the excess raw materials in the open market.
On the other hand, if the actual wastage rate is higher than the rate set by the government, the authorities impose duty, supplementary duty and VAT on the extra wastages.
Various types of yarns and fabrics are used to make knitwear products of different designs and qualities where the wastage rate is 20-40 per cent and the rate is even more in some cases, they said.
Fazle Shamim Ehsan, Vice-President of the BKMEA, said, “The new rate will encourage fabric imports and will damage the backward linkage industry. So, we want logical wastage rate.”
Before publishing the office order, the ministry also proposed 25 per cent for basic readymade garment items, 28 per cent for specialised items and three per cent for sweaters and socks. But the exporters strongly opposed the proposal.
Earlier, the wastage rate was 16 per cent in manufacturing garment items from yarns and fabrics.
