June 28, 2007	Thursday	Jamadi-us-Sani 12, 1428

LAHORE, June 27: The government has imposed 10 per cent excise duty on the import of viscose staple fibre — a move criticised by the spinning industry alleging that it would protect a local manufacturer.

“The imposition of excise duty on import of viscose staple fibre will hit the spinning industry hard,” Aptma Chairman Shafqat Elahi told Dawn on Wednesday.

“The government has taken this regressive measure at a time when the industry is experiencing shortage of raw materials. This is totally uncalled for and unacceptable,” he said.

The decision is believed to have been taken to protect a viscose staple fibre manufacturer who has set up a plant in Lahore.

“We are not against the government subsidising the manufacturer of viscose fibre. But it should be done through a non-market related mechanism. The local spinning industry must not be punished,” he said.

The country imports around 30,000 tons of viscose a year, whose price has already shot up to $2.65 per kg from $1.25.

The spinning industry, which is faced with tough times owing to rising cost of doing business because of internal and external factors, is already demanding the government to take measures to help it reduce its cost of production.

But the latest measure is going to add to its costs as the spinners say the imposition of the duty will make the local and imported viscose staple fibre 10 per cent expensive in the domestic market.

“It will render the spinners further uncompetitive in the global markets,” Elahi said.