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Pakistan garment sector unhappy with high raw material tax
17
Oct '13
The heavy duty on import of textile raw material in Pakistan forces garment makers to use cotton as the core input, said Jawwad A Chaudhry, the newly elected senior vice chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) upon assuming charge.
 
The PRGMEA senior vice chairman said Bangladesh, which produces no cotton, allows duty-free import of all kind of raw material, which has pushed its value-added textile exports to US$ 26 billion, while Pakistan has yet not been able to cross US$ 4.5 billion.
 
Mr. Chaudhary said, so far Pakistan mainly produces only Generation I and II garments, as production of Generation III and IV garments remain to be a challenge in the wake of raw material constraints.
 
The Pakistani apparel industry comprises of small and medium size enterprises, which produce high-end fashion products, however, unfriendly import policies restrain these producers from utilizing their full potential.
 
The retiring PRGMEA central chairman Sajid Saleem Minhas said allowing duty-free import of  synthetic blends and cotton fabrics, which Pakistan does not produce at present, can boost country’s apparel and sportswear exports by two-fold.
 
Mr. Minhas said import of small trims, having no commercial value, should also be made duty-free, so as to avoid any delays. 
 
Low import duties would enhance the competitiveness of Pakistani textile products under the EU GSP, he added.
 
Further expressing disappointment over delay in clearance of refund claims of textile and garment entrepreneurs by the Federal Bureau of Revenue (FBR), Mr. Minhas said that since February 2013, no firm has received refund of two percent sales tax on raw material purchase for export orders. 
 
Besides, billions of rupees of the value-added textile industry are even trapped in unpaid refund claims of 2010, he added.
 

Fibre2fashion News Desk - India


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