Daily Times

KARACHI: Members of the National Assembly (NA)’s Standing Committee on Textile Industry and representatives from the textile sector Tuesday discussed matters relating to the textile industry.

Both the parties discussed the issues being faced by all value-added textile associations, especially high tariffs of electricity and gas in Pakistan and its affect on exports.

The NA committee was of the view that tariffs and wages should be brought down at par with regional competitors to make the textile sector competitive. The committee agreed with the viewpoint of the value added textile sector and also seconded the proposals floated by the value added textile associations.

It was proposed that custom rebate claims should be settled and paid through the State Bank of Pakistan at the time of realisation and payment of export proceeds. “Refunds of sales tax on packing material should be decided on a fixed percentage basis and refunded along with exports proceeds through the SBP,” the meeting heard.

The meeting said that the Workers Welfare Fund (WWF) rate should be exempted for exporters, which was being collected at the rate of 2% of profit.

It was proposed that the Export Development Surcharge (EDF) on exports be abolished and the Trade Development Surcharge be levied on imported luxury items such as cars, soap, shampoo, cosmetics and other finished goods.

“As the government had abolished the duty and sales tax on import of cotton, duty and tax on import of cotton yarn should also be removed, and yarn should be allowed to be imported for manufacturing of goods destined for export.”

The meeting recommended that manufacturing (stitching) units should be allowed to import raw material under the Duty and Tax Remission Scheme (DTRE).

Value Added Textile Associations Chairman Jawed Bilwani highlighted the issues and problems faced by the value added textile sector which had contributed $11.08 billion – 53 percent of total exports and 89 percent of total textile exports – and generated 42 percent of the total employment including female workers.

He informed the meeting that in 1990, textile exports of Pakistan stood at $3.67 billion, Bangladesh $0.98 billion and India $4.71 billion and in 2016 the export of Pakistan stood at $12.45 billion with a 239 percent growth; Bangladesh $27.49 billion with 2,705 percent surge and India’s textile exports at $37.65 with 699 percent growth.

Bilwani said that in 1991, cotton production of Pakistan was at 12.8 million bales, India at 9.7 million bales, while in 2016 it was 9.7 million bales in Pakistan with 24 percent decrease.

“It is, therefore, proposed that instead of a 4% rebate on export of cotton yarn, the government should provide a cash incentive of 4% on local sales (indirect export) of cotton yarn to local value-added sector for a win-win situation. In this way, spinners would be encouraged to sell yarn locally and higher value would be realised through value addition,” he added.

Present at the meeting were Haji Muhammad Akram Ansari, Sardar Muhammad Shafqat Hayat Khan, Rana Umer Nazir, Malik Shakir Bashir Awan, Aqibullah Khan, Colonel (r) Dr Amirullah Marwat, Malik Abdul Ghaffar Dogar, Muhammad Ayaz Soomro, Romina Khurshid Alam, Beelum Hasnain and representatives from the Value Added Textile Association, Pakistan Apparel Forum, Pakistan Cotton Fashion Apparel Manufacturers and Exporters Association, Pakistan Hosiery Manufacturers and Exporters Association, Pakistan Readymade Garments Manufacturers and Exporters Association and others.