KARACHI, July 5: All Pakistan Textile Mills Association (Aptma) has resented the government decision for increasing import duty on various textile machinery not manufactured locally.

The association in a representation made to the government has expressed its fear that such a move would retard the growth and adversely affect the on-going measures of Balancing, Modernization and Replacement (BMR) in the industry.

Aptma feels that increase in import duties on machinery for spinning as well as downstream weaving and finishing industry will halt the investment in textile industry, which is a major contributor in exports and economic development of the country.

The benefit of relocation of textile industry from the developed countries, including the US, will be taken by other competing nations, who have zero import duty on machinery and capital goods, the association asserted.

It has urged the government to immediately restore the previous rate of 5 per cent duty in order to allow the industry to undertake its current BMR and expansion programme smoothly ahead of 2004 when textile quotas would be phased out.

Aptma further stated that most of the current expansion plan is being carried out by the industry through its own resources, and very few units have approached the banking sectors for finances and loans.

Similarly, the association has pointed out that SRO439 (I)/2001 was rescinded on June 18, 2001, to facilitate textile units by doing away with the requirement of obtaining installation certificates on each import of machinery and equipment. However, the requirement of installation-cum-production certificate has not been withdrawn from SRO987(1)/99. It demanded that this requirement under SRO987(1)/99 should be waived.

Aptma also demanded that the clearance of bonded cargo be allowed against indemnity bond, and requirement under new chapter 13 of safe transportation scheme for the carriage of bonded goods i.e. machinery and raw materials against the bank guarantee should be withdrawn.

In the federal budget, the association pointed out, though the import duty on the basic raw materials used by the industry has been slashed by 5 per cent, the import duty on the product manufactured by the industry has been reduced by 10 per cent. “This has created a fiscal anomaly and now the raw materials are subject to higher rate of duty i.e. 20 per cent, whereas the end product is subject to a lower rate of duty i.e. 10 per cent,” it added.

In order to boost textile exports, Aptma demanded that the initial depreciation allowance on second-hand plant and machinery should be allowed. It has stated that after withdrawal of this facility, leasing companies will charge considerably higher rental for lease of second-hand plant and equipment.