Pakistan Yarn Export Tax Closed 25 Garment Mills

Over the past two weeks, nearly 25 spinning mills have been closed due to the government's export duty on quality yarn, while local businesses do not use premium yarn.

Ejaz Gohar, President of the all Pakistan Textile Mills Association (APTMA Punjab), said that the textile mills that produce high quality yarns have the ability to control their inventories, and are currently working on them, and assure buyers that once the government has fulfilled their commitments and cancels the ban in July 26th, they will deliver the goods according to export orders.

In addition, members of APTMA also said that cotton imports and exports were tax-free and cotton was the basic raw material for cotton yarn.

However, yarn prices are higher and yarn export is subject to a 15% export tax.

In addition, although 4.5% tariffs and anti dumping duties are imposed on imported polyester fibers, the yarn imported from polyester short line is not taxed according to SRO 15 (I) in January 6, 2010.

APTMA's PET staple Committee asked the government to remove all prohibitions on the import of PSF and raw materials from the textile industry. They said that zero tariff should be imported, mainly because the tariff rebate system did not work.

The cotton mill further pointed out that the key to the surge in textile exports may be polyester staple products. The world's PSF consumption is about 65%, while the cotton consumption is 35%.

Because of discriminatory tariffs on polyester staple products, the Pakistan textile sector has no access to the PSF products based textile market.

The mills claim that the price of China's PET staple is 100 rupees / kg, and the Chinese FOB price is 1.17 yuan per kilogram, compared with 133 rupees per kilogram for Pakistan manufacturers.