KARACHI: The yarn merchants have rejected the government’s proposed 5 percent regulatory duty on import of synthetic filament yarn of polyester.
Pakistan Yarn Merchants Association (Sindh-Balochistan Zone) Chairman Danish Hanif, in a statement, said that duty on polyester filament yarn, which is the basic raw material for fabric industry, was already higher therefore another 5 percent Regulatory Duty was unjustified. He said that on top of the above mentioned, there is an ongoing Anti-Dumping Duty investigation by National Tariff Commission (NTC) and the preliminary findings came out to be 6.23 percent (on average) on Chinese polyester filament/synthetic yarn (PFY).
Therefore, the total impact on the import on PFY will be CD 12pc + RD 5pc (proposed) + 6.23pc Anti-Dumping Duty = 23.23pc, whereas the finished polyester filament fabric will have CD 16pc + RD 5pc = 21cp, so the tariff on imported polyester filament fabric will be cheaper than its basic raw material ie polyester filament yarn, he informed, adding that this will be a total disaster for SME sector of the looms in Pakistan and it will lead to huge unemployment.
Danish pointed out that Pakistan started PFY manufacturing at the same time with Thailand, Indonesia Malaysia and India, whereas China started a decade later on similar plants. In due course, all these countries moved to direct spinning process and kept on increasing their capacities as well as modernising them by replacing texturising machines, providing a full range of products domestically as well as internationally at competitive price. On the other hand, the two Pakistani units producing 58,000MT in 2002 remained at the same production capacity till date with third one having very small production still depends on import of pet chips. “Is it justified to put RD to protect 2 or 3 industries vs 5,00,000 people. These 2 or 3 industries are providing employment to only 1500 families whereas 2,00,000 families are associated with the SME sector”, he added.
He was of the view that there is no justification for higher Customs Duty and imposition of RD when the domestic production is only at 25 percent of the total domestic requirement with limited range of products. As you can see from the above polyester chain except PFY, all the other industries are paying custom duty in single digit without any RD imposed.
