ISLAMABAD, April 2: The textile industry has proposed to the government to reduce customs duty on import of textile machinery from 5 per cent to zero in the up-coming budget of 2005-06. Officials told Dawn on Saturday that the ministry has also proposed zero customs duty and sales tax on import of all kinds of raw materials used in the textile related exportable products. According to the officials, the ministry has also proposed to the government to scale down the rates of import duty from around 25 per cent to 5 per cent on import of spare parts particularly used in the textile industry.
These officials said that the proposals would be considered in the up-coming budget in a way to reduce the input cost of the textile industry, which would subsequently help in reducing the competitive edge of Pakistani textile related products in the international market. Talking to Dawn on Friday Textile Industry Minister Mushtaq Ali Cheema said his ministry has formulated a comprehensive package for the textile industry to cope with the challenges of a post-quota regime particularly to compete with the products of India and China in the international market.
Elaborating further the minister said his ministry has also proposed amendments in the duty drawback scheme in order to facilitate the exporters. However, he said that in case of zero duty on import of raw materials, there would be no issue of duty drawback on textile products. The minister said that the proposed scheme of delivery of goods without the payment of sales tax would also help to a great extent to resolve the sales tax refund issue of the textile exporters, which stood at around 70 per cent out of the total sales tax refund.
The government has yet to equip the newly established textile industry by not posting secretary, additional secretary and other supporting staff even after the nine months of the establishment of the ministry. The minister admitted that this shortage has hampered the work of the ministry. However, he said that in consultation with the relevant stakeholders—textile manufacturers/exporters, a comprehensive package was sent to the federal government for consideration in the upcoming budget.
Replying to a question, the minister said that the Karachi textile city plan and framework of the garment city to be established in Lahore has also been finalized. To another question the minister said that the reports regarding the contamination free cotton, re-vamping of the ginning industry, labour issues and environmental issues would be finalized in the next few weeks.
Mr Cheema said that all the issues confronting textile industry starting from seed cotton, ginning, spinning, fabric, processing and export would be taken care of at the ministry.
Replying to a question, he said on the contrary, other cotton growing-countries have witnessed robust growth, mainly due to reorganization and modernization of the industry. Even non-cotton countries such as Sir Lanka and Mexico were doing well through seller-buyer alliance, he added.
