Apparel sector: Govt urged to withdraw duty on cotton yarn import

Says sector not taken on board when finalising Rs180b package

KARACHI: The Pakistan Apparel Forum (PAF) has urged the government to withdraw customs duty, sales tax and regulatory duty on the import of cotton yarn up to 32 single coarse counts, a major raw material of value-added apparel sector.

“The government has withdrawn custom duty and sales tax on import of cotton due to decline in cotton production. Since there is also shortage of yarn in the country, we request the government to do the same in the case of cotton yarn,” stated a letter sent by the PAF to Prime Minister Nawaz Sharif on Saturday.

The apparel exports of Pakistan are to the tune of $5.3 billion per annum and the industry provides employment, directly and indirectly, to millions. However, this sector was not taken on board while formulating and finalising the Rs180-billion export package, it added.

“We believe that rebate on yarn exports will benefit our international competitors more who will get cheaper yarn than our local industries. This will support their business and would have a negative impact on local value-added industries.

“We suggest that rebate on yarn should be given to indirect exports (local sales) instead of direct exports of yarn,” the letter stated.

“This 4% rebate on cotton yarn will further lead to unbridled exports of our precious raw material. In the conversion of cotton the major component is electricity after cotton, which means electricity is also being exported in the shape of export of yarn while the industries here are starving for electricity.

“Government grants 4% rebate on providing raw material - yarn to our otherwise competitors.”

The PAF consists of Pakistan Hosiery Manufacturers and Exporters Association, Pakistan Readymade Garments Manufacturers and Exporters Association, Pakistan Knitwear and Sweater Exporters Association and Pakistan Cotton Fashion Apparel Manufacturers and Exporters Association.

Published in The Express Tribune, January 22^nd, 2017.

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