20000310

Duty concession on tape yarn

Traders warn of

losses of over

a billion rupees

RECORDER REPORT

KARACHI: The government has been warned of losses of over one billion rupees in revenues if a proposed duty concession is granted to the raw material used by the polypropylene industry.

Pakistan Commodity Traders Association (PCTA) has written a detailed letter to the Secretary of the National Tariff Commission (NTC), apprising him of the negative consequences of the government move for a reduction of custom duty to only 10 percent ad valerom from present 25 percent on Poly-Propylene (PP) tape yarn grade material for manufacturing PP woven sacks.

"We oppose any discriminatory or preferential treatment to a specific group within the trade or industry that is again the declared policy of the present government to cascade the rates of customs duty into categories of basic and intermediate raw material, semi finished and finished goods, while doing away with all sorts of exemptions," Abdul Majid Agar, convenor of PCTA, said in his letter to the NTC, copies of which have also been sent to the finance and commerce ministers as well as the Central Board of Revenue.

He said that the very basis on which the application had been moved for reduction in customs duty did not exist and the ground on which a justification had been made was misleading and misrepresented. In fact, he said, "no real anomaly existed in the rates of customs duty applicable on import of polypropylene woven sacks and the polypropylene tape yarn grade raw material.

"The total import of finished woven sacks is not more than four percent of the total quantity of PP tape yarn grade imported into Pakistan and the total volume of PP woven sacks produced in the country. The finished bags imported are mostly meant for re-export or of the type which are not produced in the country. How can it be justified to allow an outrageous concession on such flimsy grounds," he said.

"It is more justified to either restrict the import of finished woven sacks or further increase the rate of customs duty on the product, instead causing an enormous loss of revenue to the tune of Rs. one billion only to tamper some industries which are not satisfied with normal commercial earnings and targeting for windfall profits."

"The customs department is well aware of the statistics and facts," he said, an expressed the hope that these facts would provide the basis and guideline for the authorities before any decision is made to introduce any exemption or concession. "If the concession is allowed, it would be in contrast to the national interest and is most certainly going to cause further damage to the investment climate due to inconsistency in trade policy," he said.