Pakistan textile industry faces setback over import of specialized manmade fibre

All-Pakistan Textile Mills Association (Aptma) has drawn the attention of the Federal Minister for Textile Industry Abbas Khan Afraidi towards the duty of five percent still imposed on imports of specialized manmade fibre, such as viscose, acrylic, bamboo, lycra and slub due to which the industry is facing problems. Aptma Chairman Mohammad Yasin Siddik, in a letter to the minister, has stated that Pakistan has no plants for producing specialised manmade fibre. He also revealed that the usage of man-made fibre in Pakistan is less than 20 per cent in contrast with 60pc in other textile producing countries. The Aptma chief mentioned that in the budget 2014-15 one percent customs duty and 5percent sales tax has been imposed on import of raw cotton. This has lead to increase in the cost of end product as spinning industry has to import around 25percent (two to three million bales) of its total cotton demand, including long staple and contamination-free to produce high value yarn and high end value added products. It was also, pointed out that textile raw material fabric waste was being imported under HS Code 6310. As fabric waste (HS Code 6310.9000) is also a direct raw material used by spinning mills and not as finished product rather input or raw material for the spinning industry, they are being made to pay 17percent sales tax on input and the yarn so produced is chargeable at 2percent sales tax which is on output. However, after the issuance of SRO 504(1)2013 dated June 12, 2013 FBR has excluded Chapter 63 completely from the ambit of sales tax at 2percnt by excluding from table-1 of SRO 1125(1)/2011, as a result customs is assessing their consignments of HS Code 6310.1000 and 6310.9000 at 17percent sales tax and 5percent income tax.