KARACHI, June 21: The Polyester Staple Fibre Manufacturers Group has urged the government to restore 6.5 per cent import tariff on PSF, otherwise the industry will shut down.In a statement issued on Saturday the group said that the import tariff on PSF had been reduced from 6.5 per cent to 4.5 per cent in the federal budget without any notice.

It said the textile exporters already have the option of importing PSF duty-free under the Duty and Tax Remission on Export (DTRE) scheme, so this reduction would not give any benefit to the textile exporters.

It is highly perplexing that in a budget where the primary theme was discouragement of imports to control the widening trade deficit, the import substitution industry of PSF has been disadvantaged, the group said.

The statement said the PSF manufacturers felt that they had been singled out and were being treated differently. All this was done despite the fact that PSF consumption in Pakistan stood at 16 per cent in 2007 as a percentage of total fibre consumption, which is at par with the world average of 17 per cent primarily due to local availability of PSF at highly competitive prices, it said.

“Apparently this reduction of import tariff specific to the PSF industry has been carried out on the demand of All Pakistan Textile Mills Association (Aptma),” the group said.

It would be pertinent to recall that the government in 2005 on the request of Aptma reduced import tariff on PSF from 20 per cent to 6.5 per cent with the aim of boosting the textile sector’s performance. However, the textile sector’s performance since then has been exhibiting a decline.

It, however, estimated that the consequential benefit in terms of reduction in cost of manufacturing the final products

(such as garments) would be negligible at less than half a per cent.

It said the financial performance of the domestic PSF manufacturers isolated from their respective business group’s performance clearly shows that they are struggling to survive even at 6.5 per cent import tariff.

“A great injustice has been done to the domestic PSF sector. The self-sufficient domestic PSF industry has never sought nor will it ever seek any subsidies or support of any other kind from the government,” the group demanded.