The sale of counterfeit cosmetics remained on the rise in most of the markets in the provincial metropolis on the eve of Eid-ul-Fitr, thus depriving the national exchequer of huge amount of revenue on account of General Sales Tax and Excise Duty.
According to sources, except a few outlets of the renowned departmental stores in the city, fake cosmetics like face cream, whitening cream, lotion, lipstick, nail polish and shampoo were sold at most of the shops/carts in the city markets and bazaars including Ichhra, Chungi Amer Sadhu, Chowk Yateem Khana Bazar, Bhaghbanpura, Ramgarh Bazar, Kashmiri Bazar, Ismail Nagar Bazar, Mozang Bazar, Krishan Nagar and Shahdarah. Such products, being cheaper, attracted a large number of customers from the low-income group, the sources added.
Whilst the law exists to control counterfeiting, enforcement is patchy and ineffective, mainly because prosecution lacks commitment. Traders at the Shahalam Market 'openly deal in wholesale counterfeit and smuggled goods worth million of rupees on daily basis' but paying nothing to the government, as they don't keep proper record of the purchases from the supplier and sales to the retailers. They issue only "katchi" receipt without folio or serial number and stamp on it to the buyers, the sources claimed.
Earlier, the privileged class was the only consumer of cosmetics products like shampoos, hair conditioners, skin creams and lotions but presently, because of aggressive publicity/advertisement, tendency of using these items in the society is rapidly growing. But the advertisers have made the people believe that conventional soap is an alternative to shampoo damages hair, resulting in various problems like scalp dryness, scaling, dandruff, itching, hair loss and early discoloration.
The per capita consumption of such items in Pakistan lags behind other Asian countries because of high tariffs, leading to the manufacturing and marketing of counterfeit cosmetics, which have serious threat to the consumers' health. The products cause skin diseases like skin cancer. These are also one of the main sources of skin disorders including facial itch and rashes, as these cause skin irritation, particularly with sensitive skin.
Allergy that usually arises out of excessive and inappropriate use of fake cosmetics like whitener cream is another sort of skin disorder, they added. The manufacturing/importing companies believe that if 10-percent Federal Excise Duty is withdrawn on the cosmetics including shampoos, hair conditioners, skin creams and lotions, it would help reduce their prices on one hand and discourage smuggling and under-invoicing in import on the other. Withdrawal of Excise Duty will be a further step in creating a more level playing field. With a view to check counterfeiting in the country, the aggrieved businessmen should be allowed to become interest parties in the case, the sources demanded.
Moreover, availability of genuine products at affordable rates would also help discourage manufacturing and marketing of fake products. If the businesses of the legitimate companies are protected from counterfeiters, the country must be witnessing huge expansion in this sector, sources said.
With the growth in sales of formal sector, incremental revenue in form of GST and Income Tax will offset the loss from withdrawal of Excise Duty, they said and added that a level playing field would also encourage new entrants and promote healthy competition, all to benefit the consumers.