The Federal Board of Revenue (FBR) will examine the possibility of imposing uniform rate of customs duty on all kinds of fabrics in the next budget. The Federation of Chambers of Commerce and Industry (FPCCI) had proposed that import of fabrics under HS Code 54, 58, 59, 60 where the import duty varies from 15 percent to 25 percent, it is suggested that uniform rate of duties should be imposed to avoid misdeclaration.
Sources told Business Recorder on Saturday that the FBR has issued instructions to the Model Customs Collectorates (MCCs) to examine the FPCCI issues and customs department''s response on each issue. The FBR responded that most of the finished fabrics attract 25 percent rate of duty. The rate of duty on polyester fabrics was reduced to 15 percent as part of tariff rationalisation of polyester chain, after consultation with stakeholders.
The proposal of the FPCCI for having a uniform rate of duty on all kinds of fabrics will be examined in the forthcoming budget. The FPCCI raised another issue that rate of duties on similar products covered under different HS Codes and charge differently (like dyes and chemicals used in textile industry) should be uniformed.
Responding to the proposal, the board opined that it is the policy of the FBR to levy rate of duty on the principle of cascading on raw material, intermediary goods and finished goods, keeping in view the international commitments and aspect of local manufacturing. The dyes which are used mostly in export are at 0 percent duty like indigo blue and basic dyes. The proposal of uniform rate on dyes will be further examined by the customs department for having a uniform rate.
The FPCCI said that chemicals companies are witnessing slide down in sales and earnings as the domestic economy remaining stagnant and export markets challenging. In such a scenario the caustic soda producers in Pakistan will be forced to close down if the government does not take appropriate measures to save the industry. Therefore, to save the local manufacturer of caustic soda the rate of import duty as imposed last year should be restored.
To this question, the FBR stated that the caustic soda solid and caustic soda liquid are subject to duty @ 5 percent and Rs 4000 per ton respectively in the previous year and current financial year. However, industry specific concessionary rate has been allowed in the current year.
Now, pharmaceutical industry may import caustic soda solid at 5 percent duty and formic industry may import caustic soda liquid @ Rs 2000 per ton. The FPCCI raised another issue that exporters in fan industry are very disturbed to learn that regulatory duty @ 25 on export of non-ferrous metal scrap (aluminium scrap falling under HS Code 49.02 and copper scrap falling under HS code 74.04) has been withdrawn in the recent Budget.
It is requested to withdraw SRO 495(1) 2009 and impose regulatory duty at 25 percent, as previously, on export of the scrap of aluminium (HS Code 76.02) and copper scrap (HS Code 74.04). This will increase the export of value-added products otherwise the exports of value-added products will be affected very badly. The FBR was of the view that the regulatory duty was abolished in last budget. The proposal will be examined again in consultation with all stakeholders, sources added.