LAHORE, Oct 7: The Central Board of Revenue (CBR) is expected to again accord the facility of Duty and Tax Remission Rules for Export (DTRE) scheme to the import of synthetic fibres. It would make the export of blended yarn and its made ups zero-rated, a senior CBR official told Dawn on Saturday.

“CBR Chairman Abdullah Yousuf has recently held separate meetings with the local producers of synthetic fibres as well as the spinners to know their respective points of view on the issue,” the official, who asked not to be named, said.

“The CBR has been directed by Prime Minister Shaukat Aziz to look into the issue and find a way out to make export of blended yarn and its products zero rated as demanded by the textile industry,” he said.

The spinners had drawn the attention of the prime minister towards the importance of this issue for the textile industry during their meeting with him weeks ago.

However, the CBR chairman wanted to consult with both the textile spinners and the producers of synthetic fibres before making a decision on the issue because it involved “conflict of interests” between the two sectors.

The official said the CBR had been considering more than one proposal, including inclusion of import of synthetic fibres into the DTRE scheme, offering fixed rebate to the exporters for resolving the issue. But, he said, the textile exporters had expressed their aversion to any proposal that kept import of man-made fibres out of the DTRE scheme.

“The proposal offering rebate was shot down by the textile exporters because of the complications involved in it,” the CBR official said, adding that the CBR was now contemplating to include again import of synthetic fibres in the DTRE scheme.

When contacted, a textile spinner privy to developments in this regard confirmed that the industry did not want anything less than permission to import the synthetic fibres under the DTRE scheme.

The import of synthetic fibres, especially polyester staple fibre (PSF), was taken out of the DTRE scheme in the budget for the current financial year and subjected to 6.5 per cent customs duty only after one year of its induction in the scheme.

It was included in the DTRE scheme with a view to increasing exports of blended yarn and its products. Besides, the import duty on Man-made fibres was also reduced from a hefty 20 per cent to 6.5pc for local consumption to meet the long standing demand of the textile industry for encouraging use of synthetic fibres.

The removal of the synthetic fibres from the DTRE scheme was seen by the textile industry as a move taken under the pressure exerted by the local producers of synthetic fibres.

The government decision to remove the synthetic fibres from the DTRE scheme is said to have made Pakistan’s blended yarn and its products 6.5 per cent costlier than their competitors like Thailand and India. Besides, the textile spinners claimed that the domestic producers of fibres also raised their prices immediately.

Meanwhile, the National Tariff Commission (NTC) has initiated anti-dumping investigations against nine suppliers of synthetic fibres from three South East Asian countries on a complaint filed by the local producers of synthetic fibres. The local producers are said to have called for imposition of 25 per cent anti-dumping duty in their request.

Commenting on the anti-dumping request a leading textile exporter said, “We do not want the local producers of synthetic fibres to make losses. But we want the government to allow import of man-made fibres under the DTRE scheme so that a check on the prices of local fibres is maintained.”

“If any polyester producer is making loss, the government should compensate it directly without burdening the export industry,” he added.

He said during the one year period covered by the anti-dumping investigations only 29,000 tons of synthetic fibres had been imported, which made less than five per cent of the total domestic production. “Where is the injury to the local producers as claimed by them in their request for anti-dumping proceedings against the foreign suppliers of synthetic fibres?” he asked.

“It is because of that the spinners have proposed to the CBR to determine the quantum of import of synthetic fibres that could cause injury to the local producers, and restrict their inflow into the country below that level to allay their fears,” he said.

It will be a win-win position for both the industries, which need to supplement each other rather than one causing damage to the other, he added.