PROBLEMS GALORE AS FINISHED LEATHER IS NOT CONSIDERED "FINISHED LEATHER" FOR EXPORT AT THE CUSTOMS

PROBLEMS GALORE AS FINISHED LEATHER IS NOT CONSIDERED “ FINISHED LEATHER” FOR EXPORT AT THE CUSTOMS

V.M. KHALEELUR RAHMAN

The Council for Leather Exports (CLE) deserves praise for taking a right decision at least now to work for revision of the existing norms for identification of finished leather for export. Better late than never. It says in a recent circular that it has been working for the revision of the norms as tanning technology and leather finishing processes have undergone many changes since its coming into force in 1992 and the revised norms would facilitate export of finished leathers from ports without any problem.

According to the CLE, the revised norms framed by the Central Leather Research Institute (CLRI) in consultation with the leather industry and other stake holders and sent to the Directorate General of Foreign Trade (DGFT) in August 2008 have not been approved and notified despite its following up with the Ministry of Commerce and Industry and DGFT because according to available information the Department of Commerce, which referred the matter to other departments like Animal Husbandry , Revenue, Industrial Policy and Promotion and also the Bureau of Indian Standards and received their feedback, is planning a joint consultation meeting of the said departments shortly before a final decision is taken on the revision of the finished leather norms for export.

Tanners and exporters are desperately waiting for the export friendly revised norms as the problems faced by them at the customs are galore and terrible and their disappointments know no bounds. As I said earlier in one of my articles in Indian Leather, there are many tanners who do not want to enter into contracts for exports as they do not know if their goods will be passed or not for export or show-cause notice issued. They don't want to take risk at all. Their argument is that a leather is a leather and there should not be any meaningless and rigid norms to define and approve it by the customs.

No doubt the government has come out with many measures and is implementing them to increase industrial growth and export but delays in taking decisions on issues such as the revision of the norms etc. disappoint and discourage the tanners and exporters. When I asked a tanner about export possibilities, he said "the situation is not conducive as the export prices are unworkable and the treatment at the customs humiliating, there is no understanding that we are exporting only leather and nothing else. We cannot waste time, take risk and run every time we do some new “light colours” to the CLRI to get a certificate ( paying the fee of Rs.2041/- per testing ) to the effect that the goods we are exporting are in conformity with the existing norms as otherwise pay fines".

Another exporter also narrated his experience with the customs: “We had an export order for goat suede leathers in many colours. We made the goods ready and submitted our documents to the customs for export. We had problems in shipping them as three of the colours were considered “light” and not approved. It will be clear even to a layman that they were only finished leathers. But according to customs authorities "light colours" do not come in the category of finished leathers as per the existing norms. We cannot dictate colours to our customers. We have to prepare goods according to their requirements. The problems are serious. You can imagine the predicament of the tanners whose goods were not approved for export.”

It is also learnt from reliable sources that many export contracts remain unexecuted because of the problems. There is a 20% decrease in the export of finished leathers. It will go down further if the problems persist unsolved. Small tanners are the worst sufferers now. They feel that they are let down by the CLE and other associations. It is a fact that there is nobody to represent their case.

Many tanners and exporters I interviewed are of the opinion that the Council for Leather Exports and other leather related associations should highlight the problems faced by tanners ( at the time of export at the customs ) to the government and demand for immediate suitable changes in the existing norms for identification of finished leathers so that every exporter – small or big – is able to do business smoothly without any problem and increase their production and export so vital for the country particularly at the present time of recession.

( VMK in Indain Leather, November 2009 )