July 4, 2003	Friday	Jumadi-ul-Awwal 3,1424

KARACHI, July 3: Gujranwala Art Silk Yarn Merchants Association has urged the government to cut import duty on polyethylene Teraphthalate yarn (PET) to 10 per cent from 20 per cent besides reducing sales tax to 15 per cent from 20 per cent in order to protect exports and local industry, says a press release.

General Secretary of the Association, Mohammad Younus Qureishi also asked the government to cut customs duty and sales tax on polyester flat filament, polyester textured and polyester twisted yarn to reduce the fabric manufacturing cost.

Reacting on the report of EBR, dated June 21, (4 filament yarn units wind up business), he said he had conducted a survey and it is found that units had been closed but not due to the cut in import duty on polyester filament yarn to 20 per cent from 25 per cent on December 2002 as the story had given the impression. The four units have been closed due to consecutive losses.

Polyester filament yarn makers were asking the government to increase the customs duty to 25 per cent, he said adding the increase would flourish smuggling.

He said there are three main manufacturers of PET called chips which is a raw material to produce polyester filament yarn.

The three players enjoy monopoly. These players used to sell chips to the closed polyester filament yarn makers at high rates and selling their own manufactured filament yarn at lower prices.

The closed units had no option but to obtain raw material on cheaper prices. Should they import, they had to face high tariff and to buy chips from these three players at high prices and ultimately they failed to compete with the three players in the market of filament yarn because their manufacturing cost of filament yarns remained always higher than the three players.

Thus the monopolisation of three players remain un- challengeable and the four units were forced to buy raw material from them on their prices, which resulted in closure of four filament yarn units.