Aptma urges to abolish all duties, taxes on cotton import

KARACHI: All Pakistan Textile Mills Association (Aptma) on Tuesday expressed concern over the increase in cotton import duty from two percent to three percent, which along with the additional duty of one percent has increased the total import duty to four percent.

“This has come at a time when the textile industry is reeling from the effects of a total crop failure in the country. Production of cotton declined by almost 35 percent,” Tariq Saud, Chairman, Aptma said in a statement.

Saud said the government must take account of the situation immediately and move to abolish all duties and taxes on import of raw cotton.

Aptma Chairman further said that Cotton was one of the basic raw materials of the spinning industry and constitutes around 70 percent of raw material cost.

The government in the Federal Budget 2014-15 had levied one percent import duty which was further enhanced to one percent in the Federal Budget 2015-2016 along with sales tax at five percent.

FBR through SRO 1178(I)/2015 dated 30-11-2015 had imposed one percent additional duty on import of cotton, thus the total duty became three percent. Government in the Federal Budget 2016-2017 further increased custom duty by one percent and kept the additional duty of one percent intact, bringing the total duty to four percent.

This made the basic raw material more expensive and the domestic industry unable to compete in the international as well as domestic market. This is the reason the imports of cotton almost doubled in the 11 months of the current financial year compared to 2014-15.

Saud urged the government to restore the free trade regime in cotton trade, as originally envisaged and announced by the Prime Minister Muhammad Nawaz Sharif.