The Chairman, All Pakistan Tiles and Sanitary Merchants Association (Proposed), Muhammad Amin Lasania has claimed that the duties and taxes paid by tiles and porcelain importers is much higher than the taxes paid by manufacturers. He also clamed that there is no question of under invoicing when the values are predetermined by the customs authorities and duty and taxes are paid upfront at the time of imports.
Referring to a recently the news article, 'Revised customs values downward' published in Business Recorder in which manufactures raised voice against importers of ceramic and porcelain products from China he said, the manufacturers desire that imported tiles should not be allowed so that the local tile and sanitary ware industry have a monopoly over markets in Pakistan.
The local tile and sanitary ware manufacturers have objected to the Director Valuation's downward re.vision of prices by 0.71 % on 5 items out of 28. He pointed out that even though the manufactures have nothing to do with the revision of duty on imported tiles and sanitary ware, yet the Director Valuation has made it a point to invite manufacturers to get their counter narrative concerning prices prevailing globally.
He mentioned that the prices of most products have dropped in the international markets and same is the case with ceramics and porcelain tiles, hence the Director Valuation is left with no options but a downward revision of prices as he is responsible to ascertain the correct values prevailing and to scrutinise them as per the evidences produced by both importers and manufacturers.
It is pertinent to mention that the current valuation ruling has not done justification to the importers, as internationally the prices have dropped to around 25-30 percent, whereas the downward revision is a mere 0.71 percent which is negligible. Lasania said, that in our 'submission of proof' to the Director Valuation, we provided our customs declarations and sales tax invoices to show prices in China. He alleged that in fact local manufacturers want to discontinue imports of all ceramic and porcelain from China to achieve their monopolistic goal.
In a direct letter addressed to ceramics and porcelain manufacturers association, we offered the same prices along with the offer to purchase all such consignments under common supervision of Karachi Chamber of Commerce an Industry (KCCI), however, they have not only refused to accept our offer, but are also refusing any direct correspondence with them in future.
He claimed that the duty applied is adequate enough to safeguard domestic ceramic and porcelain manufacturers, and apart from this the valuation ruling is nearly 30 percent higher which further burdens ceramic and porcelain importers. Importers in China pay 73% on ceramic tiles and 78% on polished porcelain tiles in duty and taxes, besides 2% extra tax which has to be paid on sales, he added. In the United Arab Emirates (UAE), the import duty is 5 percent - a local ceramic and porcelain manufacturing concern there exports tiles throughout the world including Pakistan and still runs in profit.
. Our local manufacturers citing the example of a single porcelain and ceramic concern in China, have tried to convince policy makers that the Chinese cost of production is higher - a single example out of over 3000 manufacturing units in China cannot represent the entire imports from China and secondly every manufacturing unit has its own strategy for a specific market sector and their production is on par to cater to their specific target.
He said that even the specific report which the local ceramic and porcelain manufacturers cite, does not justify their views on inflation in China, and neither an increase in their cost of production. as their annual report stated that "gross margin improvement was also a result of lower raw material cost and lower fuel cost ".
Where the prices of all items have dropped in international market, so is the case with raw-materials and fuel cost, in such circumstances how can anyone speak of increases in production costs. He said that absurd arguments and justifications by manufacturers will never lead to any positive result, but on the contrary we wish to ask them to declare their production capacity of yester years and today. How is it possible for any manufacturer to increase production manifold if they are sustaining heavy losses, he questioned.
In another news article under heading, 'Ceramic industry denounces increase in tax & duties,' the manufacturers have strongly contested increase in duty on raw materials for tiles by the Government of Pakistan, it is but natural where the prices drop, our government increases the duty rate to cover-up shortfalls in national kitty.
The same has happened with imported tiles from China, that in the past had the advantage of Regulatory Duty (RD), under the Free Trade Agreement (FTA) with China, but since 2015 that advantage has been withdrawn and all importers now have to pay RD of 20 percent on polished porcelain tiles and 15 percent on ceramic tiles.
He said that the local manufacturers have left no stone unturned and had also approached the National Tariff Commission (NTC) and in 2006 submitted an application that China is dumping tiles in Pakistani markets and therefore 'Anti-dumping' duty be levied on all tiles imported from China, but after 9-years litigation - they could not justify their arguments and ultimately withdrew their claim from the NTC.
Of recent, they have once again filed a fresh application with the NTC for again imposing the Anti dumping duty on imports from China. They have a full-time department within their association that is tasked is to make ceramic and porcelain importers abolish their legal imports.
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