KARACHI: All-Pakistan Textile Mills Association (Aptma) has drawn the attention of the Federal Minister for Textile Industry Abbas Khan Afraidi towards problems confronting the industry.
Aptma Chairman Mohammad Yasin Siddik, in a letter to the minister, lamented that Pakistan has no plants for producing specialised manmade fibre, such as viscose, acrylic, bamboo, lycra and slub, but a duty of five per cent is still imposed on its imports.
He revealed that the usage of man-made fibre in Pakistan is less than 20 per cent in contrast with 60pc in other textile producing countries.
The Aptma chief mentioned that in the budget 2014-15 one per cent customs duty and 5pc sales tax has been imposed on import of raw cotton.
He said that it would enhance cost of end product as spinning industry has to import around 25pc (two to three million bales) of its total cotton demand, including long staple and contamination-free to produce high value yarn and high end value added products.
He further pointed out that textile raw material fabric waste was being imported under HS Code 6310.
However, after the issuance of SRO 504(1)2013 dated June 12, 2013 FBR has excluded Chapter 63 completely from the ambit of sales tax at 2pc by excluding from table-1 of SRO 1125(1)/2011, as a result customs is assessing their consignments of HS Code 6310.1000 and 6310.9000 at 17pc sales tax and 5pc income tax.
As fabric waste (HS Code 6310.9000) is also a direct raw material used by spinning mills and not as finished product rather input or raw material for the spinning industry, they are being made to pay 17pc sales tax on input and the yarn so produced is chargeable at 2pc sales tax which is on output.
Published in Dawn, June 29th, 2014