Sack paper importers have challenged 15 percent Regulatory Duty (RD) recently imposed by the Economic Co-ordination Committee (ECC) of the cabinet on the recommendations of Federal Board of Revenue (FBR).
The association of the importers have approached the Commerce Ministry stating that existing custom duty on sack kraft paper is 15 percent while custom duty on polypropylene granules (PP) is 5 percent, thereby an anomaly already exists in the duty structure which would be further compounded by the imposition of 15 percent RD.
The importers are also of the view that the logic given to impose RD is not applicable to this case. In this connection the importers have forwarded the following points for the consideration of the government:
(i) Sack kraft paper is imported and used in the manufacturing of high performance multi-ply paper sack for packaging of cement and is not imported for commercial trading by any of the local paper sack manufacturers; (ii) quality sack kraft paper is not manufactured locally due to lack of availability of natural resources (ie long fiber pine wood) and production process requirements; (iii) only one local manufacturer, M/s Flying Kraft Paper Mills (Private) Limited manufacturers low quality sack kraft paper using the used paper sacks (made from imported quality sack kraft paper) and mixed waste, and has limited production capacity; (iv) flying kraft paper mills (private) limited has in-house consumption of its sack kraft paper, by way of a captive cement unit and a paper sack manufacturing plant producing paper sacks for it; (v) there is no local paper mill manufacturing quality sack kraft paper in Pakistan and imports of the same do not hurt any local industry; (vi) Paper sacks compete directly with Woven Polypropylene Sacks, which are also used for packaging cement. The sources said, the case of the importers might be reconsidered by the ECC after a comprehensive examination by the FBR.
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