All Pakistan Power Looms Association (APPLA) has demanded reduction in tariff on import of polyester yarn, used as raw material of locally manufactured finished fabric.
The government is charging 70.64 percent in terms of taxes and duties from power looms, including 20 percent sales tax, 20 percent customs duty, 6 percent income tax on import of polyester yarn. On the other hand, customs duty on imported finished fabric is only 25 percent in addition of 15 percent sales tax and 6 percent income tax.
Moreover, the local market is glutted with smuggled fabrics, apparels and garments mainly produced by China, India and Korea.
These concerns were expressed by Vice-President APPLA Mohammad Ashfaq in a statement issued on Thursday.
"It has stifling effects on growth of local industries, particularly for power looms, as the smuggled and Chinese products have captured over 80 percent of the local market," he said.
In this backdrop, he demanded the government to take prompt and effective measures to rescue local power loom industry from the onslaught of smuggled and under invoiced products.
Citing these anomalies as the major cause of widespread shutdown of power looms in the country, he pointed out that because of unabated smuggling, discriminate tariff structure and under invoicing as many as 60,000 power looms units had closed down their operations since 1998.
He further asserted that as power loom industry provided a good number of jobs the massive closure of power loom units had also rendered about 100,000 people unemployed.
He requested the government for tariff rationalisation on polyester yarn, used as raw material for power loom industry and demanded effective check on illegal channels of imported fabric to curb menace of smuggling and under invoicing.
He warned that if the issue was not addressed forthwith, it would wipe out many industries, particularly power/water-jet loom industry and aggravate the unemployment problem, besides causing substantial loss to the government revenue.