APTMA slams increase in duty on cotton imports | Pakistan Today

APTMA slams increase in duty on cotton imports

The government has further increased the customs duty on cotton imports from 2 per cent to 3 per cent, while the industry has to pay a total of 4 per cent duty on cotton imports, All Pakistan Textile Mills Association (APTMA) Chairman Tariq Saud said on Friday.

The APTMA expressed its concern on the callous attitude of the Nawaz Sharif’s government which has increased the custom duty on import of raw cotton from 2 per cent to 3 per cent, which, along with additional duty of 1 per cent has increased the incidence of total import duty to 4 per cent.

“This at a time when the textile industry is reeling from the effects of a total crop failure as the production of cotton in the year 2015-16 has declined by almost 35 per cent. Furthermore, cultivation of cotton this year is expected to decline by approximately 25 per cent which will ultimately decline the availability of cotton to the spinning industry compelling them to import cotton at 4 per cent custom duty,” the chairman said.

Saud said that the APTMA has been pleading with the government to totally remove import duty on cotton so that the textile industry can operate in an efficient manner. But instead of accepting reality, they have chosen to increase the duty and further exacerbate the industry’s plight, he added.

He further said that it is not possible for the textile industry to continue to operate in these conditions and contribute to higher exports and provision of yarn to the domestic downstream if they are made to pay such exorbitant amount of duty on its basic raw material.

Pakistan has become a net importer of raw cotton and even then the textile industry is trying to remain competitive while contributing to the national exchequer besides providing millions of jobs, he said. But if we have to import over four million bales due to crop failures then the import duty must be abolished, he added.

The APTMA chairman said that the government must take account of the situation immediately and abolish all the duties and taxes on import of raw cotton. The industry is already suffering due to high cost of doing business and shortage of energy in the country and now even has to compete with a surge in cotton yarn imports from its regional competitors, he said.

The APTMA chairman further said that cotton is one of the basic raw materials of the textile spinning industry and constitutes around 70 per cent of the raw materials cost. The government in the Federal Budget 2016-17 has further increased customs duty by 1 per cent and has kept the additional duty of 1 per cent intact in the Federal Budget 2016-17, taking the total duty to 4 per cent which makes the basic raw material more expensive. He said that this has made the domestic industry unable to compete in the international or domestic markets which can be confirmed from the fact that during the last financial year the imports of cotton yarn have almost doubled compared to 2014-15.

He urged the government to allow import of cotton free of all duty and taxes till the production of cotton matches the supply requirements of the domestic spinning industry.

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