APTMA for retaining regulatory duty on imported cotton yarn

Chairman APTMA, Mr. Tariq Saud has expressed surprise and disappointment at the statement of Chairman FBR in which he has pointed out that further tax @2% is leviable on the unregistered sector. He said that the zero rating facility has also been given in the past and is nothing new. The reason for this facility is because billions of rupees of refunds remain stuck up with FBR and the industry is not able to compete because of severe liquidity crisis.

It is the responsibility of the FBR to ensure that refunds of exporters are released in time and because this was not being done the industry had no choice but to demand zero rating.

Chairman APTMA also said that during the discussion with the government in the presence of all textile sector associations representing the entire chain and attended by Senator Ishaq Dar, Honourable Finance Minister and Mr. Haroon Akhtar, Special Assistant to the Prime Minister on Revenue, it was clearly agreed that there would be zero rating on registered and unregistered sales and that all industrial raw materials both imported and local would be free from levy of sales tax.

This agreement is now being jeopardized to prevent the success of the zero rating facility by which the country would be able to regain its competitive edge and enhance exports.

He urged the Finance Minister to ensure that the spirit in which this facility was framed should remain intact to ensure its success. In a further development, the Chairman APTMA has criticized the demand of PRGMEA to remove regulatory duty on the import of cotton yarn. He said that India was dumping yarn into Pakistan at subsidized rates which is why the government of Pakistan took the step of imposition of regulatory duty. He said that more than 80% of yarn is imported under DTRE scheme and therefore the duty was not a problem for the genuine exporters of the value added sector.

Chairman APTMA urged the government to address the issue of high cost of doing business and immediately remove 4% custom duty and 5% sales tax on the import of cotton which will enable spinning industry function properly instead being crippled further by removal of Regulatory Duty.

The destruction of local industry is not in the benefits of growers as well as the downstream sector and such temporary benefits will result in long term losses to grower and downstream sector after complete destruction of spinning sector of Pakistan. He said that the export of cotton yarn has declined by almost 32% in the first 11 months of 2105-16 as compared to the corresponding period.