STAFF REPORT KHI: As the cotton crop in Pakistan has witnessed sharp reduction in output, textile manufacturers anticipate serious affects on export activities for which they have demand immediate tax holiday on import of cotton.
All Pakistan Textile Manufacturers Association (Aptma) has sent a letter to the finance minister, informing that the cotton crop had miserably failed to meet the industry requirement. There is a shortage of approximately, four million cotton bales compared to the last year and the industry will have no option but to import cotton, it added.
The finance minister has been informed that five percent sales tax and three percent customs duty was levied on the import of cotton. In order to make the basic textile industry competitive for the entire textile value chain, the levy on import of cotton should be withdrawn, Aptma said in its letter.
The communication also said the sales tax up to six percent had also been imposed on import of polyester staple fibre (PSF) and Viscose Staple Fibre (VSF).
“The local industry consumed about 15.5 – 16 million bales annually. Previously, the imports stood around 2.5-3 million bales annually,” said a local manufacturer.
However, the shortage this year has been projected at 10.8 million bales, which means the industry will need around 5-6 million bales to meet the manufacturing demand.