KARACHI, May 11: Turkey has imposed 5.4 per cent duty on import of yarn from Pakistan. The sudden move has resulted in hold-up of a number of shipments at ports in Karachi and Istanbul. The government, however, was not notified about any shift in the policy as there is no compulsion on a country to intimate such changes to its trade partners.
The imposition of duty on yarn import for Turkey, a major market for Pakistani yarn for several years, was confirmed by Pakistan’s Consul General in Istanbul Mohammed Riaz in a letter to a leading yarn exporter, Ghulam Ahmed Ismail.
The consul general in the letter said that he had contacted Dr Ustun Erol, a yarn importer, regarding duty on cotton yarn who confirmed that there was 5.4 per cent duty on cotton yarn on the condition that the fabric manufactured in Turkey was exported to other countries later on.
The diplomat said: “We have checked this position with the Turkish customs and it does not seem to be correct, as 100 per cent cotton yarn falling under H.S. code 5205.2200 is liable to four per cent customs duty plus 18 per cent VAT. However, under the GSP regime, 3.2 per cent customs duty plus 18 per cent VAT is leviable on cotton yarn. Moreover, if the imported yarn from Pakistan is processed and exported to the US then no customs duty is charged.
Meanwhile, Ghulam Ahmed Ismail, a former chairman of the Pakistan Cloth Merchants Association, said in a statement that yarn exports to Turkey would be greatly hurt. With the levy of import duty, Pakistani yarn would be costlier and the Turkish buyers would prefer to import yarn from Turkmenistan and other neighbouring countries because of cheaper freight. The quality of Pakistani yarn was much better than yarn imported from other countries, he added.
He appealed to the commerce minister to raise the issue with the Turkish government and urged them to remove the duty. He said Pakistan had been a major exporter of yarn to Turkey all these years and no import duty was ever imposed on the commodity.
Abrar Ahmed, joint secretary of exports, ministry of commerce, when contacted said that under the WTO all member countries had submitted their bound rates of duty on different products.
Any member, however, could change duty rates according to its domestic circumstances, especially to provide protection to the local industry.
He cited case of sugar in but was made zero rated to control surging prices in the local market. Similarly, Pakistan imposed a duty on import of Pakistan which had a duty incidence of 25 per cent on imports wheat in view of abundant stocks of grain available in the country.
In case of Turkey, he said that it might have imposed 5.4 per cent duty on import of yarn to provide protection to its local industry. The duty on import of yarn is not only for Pakistan but for other countries as well. Every country could impose duty to the extent of bound rates it has committed to the WTO.
Asked whether Turkey has officially informed Pakistan about the imposition of duty on yarn, he said that no country is required to intimate changes in its duty structure to its trade partners. For this importers in that country are the best source.
