Pakistan Apparel Forum urges for amendments in export package

Pakistan Apparel Forum, the biggest group of value added textile urge to amend the export package by extending rebate to indirect exports (local sales) of yarn and withdrawal of customs duty and sales tax, besides regulatory duty on import of cotton yarn up to 32 single coarse counts.

Pakistan Apparel Forum that represents the four value added apparel associations consisting of Pakistan Hosiery Manufacturers & Exporters Association, Pakistan Readymade Garments Manufacturers & Exporters Association, Pakistan Knitwear & Sweater Exporters Association and Pakistan Cotton Fashion Apparel Manufacturers & Exporters Association approached the Prime Minister Nawaz Sharif, with a written letter which was also copied to Minister for Finance Ishaq Dar, Commerce Minister Engineer Khurram Dastgir Khan, Advisor to PM on Revenue Haroon Akhtar Khan and Secretary Ministry of Textile.

The apparel sector, which is the biggest sector of value added textile with exports to the tune of $5.3 billion per annum and also provides directly and indirectly employment to millions of people despite it was not taken on board while formulating and finalizing the export package.

Therefore, they would like to draw kind attention towards some very important matters announced in the Export Package on 10th January 2017, the letter states.

The Forum has proposed following suggestions: Firstly, rebate on Cotton Yarn Exports: Pakistan Apparel Forum understands that rebate on yarn exports will benefit their international competitors more who will get cheaper yarn than local industries. This will support their business and would have negative impact on local value added industries. The Forum suggests that rebate on yarn should be given to indirect exports (local sales) instead of direct exports of yarn.

This four percent rebate on the cotton yarn will further lead to unbridle exports of Pakistani precious raw material. In the conversion of cotton to yarn, the major component is electricity after cotton which means electricity is also being exported in shape of export of yarn while the industries here are starving for electricity which will support the Forum’s competitors. The government grants four percent rebate on providing raw material, yarn, to Forum’s otherwise competitors.

Secondly, duties on Import of Cotton, The government has withdrawn customs duty and sales tax on import of cotton due to decline in cotton production. Since there is also shortage of yarn in the country, therefore the Forum requests to withdraw customs duty, sales tax and regulatory duty on import of cotton yarn up to 32 single coarse counts which is the major requirement of value added apparel sector.

It further states that the current exports can be boosted to $5 to $6 billion without adding new capacities if supply of gas, electricity, water and other allied infrastructure is provided to the industries without interruption and at price available to the Forum’s competitors.