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Hike in PSF import duty, to cost textile sector dearly
22 Jul '10
2 min read
Due to government's decision of raising import duty on polyester staple fibre (PSF) from 4.5 to 6 percent, the spinning industry will have to borne the additional cost of Rs 750 million, informed industry experts.
The increment decision was taken up, during a recently held meeting of the Economic Coordination Committee (ECC) of the Cabinet.
On this a polyester yarn spinner informed that, the spinning industry owners will have to pay up Rs 500 million, owing to rise of one percent in duty.
While the government would earn merely Rs 855,000 by virtue of an increment of 1.54 percent in duty, the spinning industry owners will have to shell out an additional sum of Rs 750 million, owing to increase in prices by domestic producers because of rise in import duty.
Together, they are paying a grant of Rs 3 billion to domestic polyester fibre producers, averred an industry expert.
Pakistan's overall usage of polyester fibre is about 450,000 tons a year. In 2008-09, usage was recorded at 430,000 tons of which 335,000 ton was manufactured by four domestic mills, who worked at 91 percent capacity.
After the shut of the world's and Pakistan's biggest polyester fibre producer, the remaining four mills namely Ibrahim Fibre, Rupali, ICI and Pakistan Synthetics manufactured 350,000 ton in FY 2009-10, whereas 75,000 ton was imported, averred an official.
Increasing the import duty would give the government only little but the four domestic producers will definitely get their pockets full with more than expected.
The increment decision was taken up, during a recently held meeting of the Economic Coordination Committee (ECC) of the Cabinet.
On this a polyester yarn spinner informed that, the spinning industry owners will have to pay up Rs 500 million, owing to rise of one percent in duty.
While the government would earn merely Rs 855,000 by virtue of an increment of 1.54 percent in duty, the spinning industry owners will have to shell out an additional sum of Rs 750 million, owing to increase in prices by domestic producers because of rise in import duty.
Together, they are paying a grant of Rs 3 billion to domestic polyester fibre producers, averred an industry expert.
Pakistan's overall usage of polyester fibre is about 450,000 tons a year. In 2008-09, usage was recorded at 430,000 tons of which 335,000 ton was manufactured by four domestic mills, who worked at 91 percent capacity.
After the shut of the world's and Pakistan's biggest polyester fibre producer, the remaining four mills namely Ibrahim Fibre, Rupali, ICI and Pakistan Synthetics manufactured 350,000 ton in FY 2009-10, whereas 75,000 ton was imported, averred an official.
Increasing the import duty would give the government only little but the four domestic producers will definitely get their pockets full with more than expected.
Fibre2Fashion News Desk - India
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