The Pakistan Yarn Merchants Association (PYMA) has suggested imposition of two-tier customs duty on the import of yarn -20 percent on the locally-produced and five percent on the stuff not produced locally.
The association, in its proposals for the 2004-05 Federal budget, said that during a meeting held in Islamabad on August 18, 2003 Finance Minister Shaukat Aziz had advised the association to pursue the matter during the next budget.
It further suggested that the anomaly in the rates of customs duty on polyester yarn, regardless of H.S. Codes, should be removed and a uniform rate of 20 percent duty should be charged.
The PYMA recommended that the government should review the tariff structures on products in the polyester chain, and demanded reduction in duty as the yarn had been removed from the negative list of Afghan transit trade (ATT).
It pointed out that since the issue of protection of local industry was not involved, the customs duty on the yarn, not produced locally, should be five- percent ad-valorem across the board.
Presently, three rates of customs duty, ie five percent, 10 percent and 15 percent, on the import of yarn having different H.S. codes were prevailing, it further pointed out.
The association said that presently all synthetic yarns, with the exception of a few, were subjected to sales tax at the rate of 20 percent, and suggested that a uniform rate of 15 percent sales tax should be fixed for all synthetic yarns.