LAHORE, Jan 14: Commerce Minister Humanyun Akhtar on Tuesday said SRO-410, governing duty-free import of the machinery, spares and raw materials for the value-added textile industry would not be withdrawn “unless all flaws in the Duty and Tax Remission for Export (DTRE) rules are removed.”
“SRO 410 has not been allowed to lapse even though it was to expire on Dec 31 last year because of flaws in the DTRE rules. As long as problems in the DTRE rules are there, the SRO will stay,” he told exporters at a reception arranged by the Pakistan Hosiery Manufacturers Association (PHMA) here on Tuesday. He said “existing flaws in the DTRE scheme had prevented it from proper take-off.”
Former PHMA chairman Shahzad Azam Khan welcomed the minister.
The minister said the exporters would shortly hear a good news regarding collection of sales tax and its refund, adding that the exports should not suffer because the government wanted to achieve its revenue target or wished to register exporters. He said all problems regarding sales tax were being addressed and a comprehensive policy to resolve all sales tax-related issues was being formulated.
INPUT COST: The minister conceded that the rising cost of production had made it difficult for exporters to compete in the quota-free environment. He said the cost of inputs and utilities including power was much higher than the rest of the world. He said he had spoken to the chairman of Wapda on this matter and asked him to offer as many incentives to the industries in the new tariff package being prepared by the public utility as possible, charging them a lower tariff during off-peak hours.
He admitted that Pakistan had though signed the WTO agreement, nobody was aware of its implications. He urged the businessmen as well as the exporters to guide him and the government on the WTO- related issues. “WTO presents many challenges. One of them is how to increase our productivity.” He said the government will ensure zero-rated exports at all costs.
Urging the exporters to improve the quality of their products, provide training to workers and upgrade machinery, he offered his full support for the setting up of a hosiery institute in Lahore. He said the “government must give a special policy for the import of machinery which is not manufactured locally.”
EU DUMPING CHARGES: The minister said the “EU had already started proceedings into the allegations of dumping of bedlinen that will continue for 15 months.”
He said Pakistan could not get these proceedings terminated at this stage. “However, we will fight our case both technically and politically. I hope the EU will not impose anti-dumping duties in the end.” But he also asked the exporters to remain “vigilant” in future to avoid any such situation.
Regarding complaints about distribution of quota, he told them that he would chair a meeting of the Quota Supervisory Council in Karachi at the end of this month where all matters and complaints would be discussed and addressed.
APTMA: Later, at a briefing organized by the All Pakistan Textile Mills Association (Aptma), the minister said the DTRE rules would be improved and the exporters’ concerns addressed.
He also promised to “look into” the matter of protection given to the ICI’s PTA plant, a manufacturer of polyester staple fibre. “I’ll look into the possibility of including the PSF in the DTRE scheme.” He also suggested to devise a “dynamic mechanism of duty drawback for exporters of PSF products as a short-term solution.”
Earlier, Aptma chairman Anjum Salim and other millers agitated against the “protection given to the PSF producers at the cost of the whole textile industry.”
They said the difference of Rs5.117 per kg of PSF in the international and local rates of polyester was preventing the use of man-made fibre by the exporters. The said the fibre mix around the world had gone up to 41:59 (cotton:man-made fibre) as against 20:80 in Pakistan. They contended that the increase in the use of man-made fibre — particularly PSF — to 50:50 will create $2.548 billion exportable surplus of yarn and $4.995 billion surplus of cloth. “The only way Pakistan’s exports can be pushed up in a big way is to promote and encourage the use of man-made fibre,” they said.