Terming government's decision to hike duty draw back rates by 0.5 to 1.5 per cent over the current rates as highly inadequate, CLE chairman Rafequee Ahmed said leather industry hit by international recession was expecting substantial increase in the drawback rates.

The duty relief given in the budget was only for the capital goods used by industry, leaving out raw materials and accessories used for making leather products, a CLE release said.

The government had also levied special additional duty of four per cent in the current budget, raising the actual burden of duties on inputs by five to eight per cent, it added.

The council had urged the government to fix a separate reduced rate of duty drawback for products using imported finished leather. Currently duty drawback facility is not extended to these products.

Vice chairman of council Nari Kalwani said the government also totally ignored recommendations for modifications in the description of products and material to avoid interpretation of problems at the time of claiming drawbacks.