ISLAMABAD: The Economic Coordination Committee of the Cabinet Wednesday approved removal of Additional Customs Duties (ACDs) and Regulatory Duties (RDs) on 169 selected HS Codes of textile sector, including fibers, yarns and fabrics of Nylon, Viscose, Acrylic, Rayon, Silk, Wool and vegetable-based fibers like Hemp, etc.
The summary was moved by Ministry of Commerce, after approval of the National Tariff Policy Board in its meeting held on August 24, 2020.
Sources in Finance Division told Business Recorder that the custom duty and additional custom duty on 169 tariff lines was ranging from 2 to 16 per cent and 2 to 7 per cent respectively.
Some of the tariff lines on which custom duty and addition custom duty will be removed after ratification of ECC minutes by the federal cabinet are as follows ; silk- worm cocoons suitable for reeling, raw cotton( not thrown), silk waste( including cocoons unsuitable for reeling yarn waster and garnetted stock), silk yarn( other than yarn spun from silk waste) not put up for retail sale, yarn spun from silk waste, not put up for retail sale, silk yarn and yarn spun from silk waste, put up for retail sale; silk-worm gut, fabrics of noil silk, other fabrics, containing 85 per cent or more by weight of silk or of silk waste other than noil silk, other fabrics, shorn wool, carbonised, of Kashmir ( cashmere) goats, other, coarse animal hair, noils of wool or of fine animal hair, other waste of wool or of fine animal hair, waste of coarse animal hair, garnetted stock of wool or of fine or coarse animal, other, coarse animal hair, carded or combed, containing 85 per cent or more by weight of wool, containing less than 85 per cent by weight of wool, containing 85 per cent or more by weight of wool, containing less than 85 per cent by weight of wool, carded, unbleached or bleached, jute(hessian cloth), woven fabrics of other vegetable textile fibres, woven fabrics of paper yarn, of viscose rayon etc
According to official sources, total revenue impact of items will be Rs 533 million for the fiscal year.
Commerce Advisor, Abdul Razak Dawood, in his tweet said that removal of custom duty and additional custom duty was in pursuance of Ministry's policy for cost reduction by reducing all duties, on raw materials as well as intermediaries and as essential part of promoting industrialization under " Make in Pakistan " and ensuring export-led growth.
He further stated that MoC will now do the same for other sectors like leather, engineering, chemicals, pharma and food etc.
An official statement issued by the Commerce Ministry, states that rationalization has been done with an objective of increasing the share of MMF (Man Made Fibers) for better per unit prices in the international markets, product diversification and, most importantly, value addition in our textile sector.
Under the review exercise being conducted at MoC, as per the three year Tariff Rationalization Plan, the National Tariff Commission has initiated studies of different sectors including textile sector. During the analysis, it was observed that textile sector in Pakistan is using 70% Cotton and 30% MMF in manufacturing of textile goods, which is opposite to the general trend among the top exporting countries in textile sector. This has a direct impact on the value addition, productivity and per unit price of our textile products in the international markets. Therefore, after due consideration, as an initial step, tariffs have been revised for some of the items.
However, under the three year plan, other sectors, including leather, engineering, pharmaceuticals, chemicals and food processing etc, are also being reviewed by the NTC, and tariffs will be rationalized accordingly.
The first phase of tariff rationalization was completed and implemented through Finance Act, 2020-21 wherein import tariff was reduced and adjusted on more than 2000 Tariff Lines. The local industry is expected to have a yearly benefit of Rs. 20 billion on the import of raw material and intermediate goods.
Copyright Business Recorder, 2020