Chairman of Taxation Sub-Committee of Karachi Chamber of Commerce and Industry (KCCI) Mohammad Haroon Agar has urged the Central Board of Revenue (CBR) Chairman to reduce the customs duty on import of phthalic anhydride (PA) from 10 percent to five percent in the upcoming Federal Budget to rehabilitate the indigenous Di-octyl phthalate (DOP) industry.
The chief of KCCI Taxation Sub-Committee elaborated that cut in import duty would help reduce the cost of production and increase competitive edge of those DOP units, based on imported PA, against the sole domestic integrated DOP units, which had been allowed to import the raw material ortho xylene (OX) at zero percent duty for the production of PA under a special SRO 565(I)/2006.
"Due to high cost of production, out of 10 DOP manufacturers, six units have closed down after the issuance of this special SRO to a local PA industry, while the rest are also at the verge of collapse," he argued. Haroon Agar said that the gap between duties on OX (5pc) and PA (8pc) was three percent against the 10 percent effective protection rate (EPR) available to local PA industry.
"When Indian PA industry can operate successfully at three percent protection rate, then why only the PA manufacturing units are allowed excessive protection of 10 percent?" he enquired.-PR
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