Locally produced raw material: PTEA demands removal of protective and customs duties
Source: CTEI Date: 2011-11-29
Nearly 8 percent customs duty and protective duty on locally produced raw material used in exportable textiles and denial of duty drawback on filament yarn are negatively impacting the exports of textiles from the country, said Rana Arif Tauseef Chairman Pakistan Textile Exporters Association while talking to newsmen here Monday.
Level-playing field was not being provided to Pakistani textile exporters vis-à-vis their regional rivals as the raw material and inputs used in manufacturing were comparatively costlier making our textiles heavy priced and incompetitive in international market, he argued.
Rival exporters in India, Sri Lanka and China were getting raw material cheaper and their input costs were also lower and they were able to sell their textiles at lower rates to international buyers, he elaborated.
In the age of cut throat competition after the free world trade order, the exporters have to cut their manufacturing cost to minimum possible for sheer survival and to remain afloat, he added.
The national governments in exporting countries facilitate their exporters providing relief from taxes, duties and levies and zero rating the manufacturing cost, he stated.
Citing example he said Indian government was allowing refund of protective duties to its exporters while China was providing cheaper raw material to its exporters.
Not only the raw material but also the cost of inputs used in manufacturing of exportable textiles was quite low enabling the exporters to sell their goods at highly competitive prices to their international buyers, he said.
Contrarily the Pakistani exporters were heavily burdened with protective duties and levies, which favoured the raw material importers and local manufacturers of inputs like filament yarn and chemical manufacturers.
These duties and levies enhanced the manufacturing cost at very first stage and coupled with high cost of energy in the country.
The manufacturing cost in Pakistan become totally unviable and incompetitive in international market, he added.
Continuing Rana Arif said that Pakistani manufacturing was burdened with the shortages and weekly closers in the shape of load shedding.
Almost 120 days a year's manufacturing was lost in load shedding cutting the production output by one third besides delaying the consignments and failure of export schedules and commitments with foreign buyers, he lamented.
PTEA Chairman demanded removal of protective and custom duties on raw materials and chemical and dyes and allowing custom rebate and drawback of local taxes on inputs enabling the manufacturers to reduce their cost of production and to compete effectively in international markets.
