Stakeholders of polyester staple fibre sector at a meeting on Wednesday got sharply divided over duty structure for its raw and finished categories, it is learnt.
Sources said that ICI Pakistan and Dewan Fibre representatives strongly opposed the other group who wanted sharp reduction in duty whereas other group termed rationalisation of duty inevitable for growth of all players of the sector.
Those who supported the idea of reduction in duty on polyester fibre in the forthcoming budget were Aptma, Pakistan Cloth Merchants Association, Pakistan Yarn Merchants Association, Small Power Looms Association, Gugranwala Power Looms Association, Ropali, and Ibrahim Fiber and Gatron.
The point of view of representatives of this group at the meeting was that existing duty structure was irrationally higher and would make Pakistan's products uncompetitive in the world market in the post-January 2005 scenario.
This group proposed zero-rated import of PTA raw material used by polyester staple fibre units, and 5 percent duty on finished product.
The group claimed that 5 percent duty on finished product was enough to protect domestic industry.
ICI and Dewan Fibre representatives opposed any reduction in duty on polyester staple fibre and demanded of the government that it should fulfil its commitment of having least difference of 15 percent in raw material used for polyester staple fibre and finished product.
The representatives of these two companies reminded the official team, headed by Commerce Minister Humayun Akhtar and comprising Planning Commission Deputy Chairman, senior officials of Commerce ministry, Central Board of Revenue (CBR) Chairman, CBR Member Exports that the government has given sovereign guarantee to their group that difference in duty structure for polyester staple fibre raw material and finished product would remain at least 15 percent.
This group pleaded that abrupt cut in duty on polyester staple fibre would damage domestic industry and shun away investment.
The domestic industry is preparing 0.6 million tons polyester staple fibre per annum and its 80 percent goes to ICI.
After the meeting, Ahmed Chinay of Pakistan Cloth Merchants Association told this correspondent that majority of the participants supported the idea of cut in duty.
He said that high duty rate of 20 percent was irrational and it would push Pakistan into gray in the WTO regime. Chinay's claim was that to get fit in the post-January 2005 scenario Pakistan needed major rationalisation of duty on polyester staple fibre.