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ECC approves withdrawal of duties on imported cotton

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Dec 30, 2019: The Economic Coordination Committee (ECC) of the Cabinet in its meeting held on December 30, 2019 approved two cases submitted by the Ministry of Commerce, related to withdrawal of regulatory duty/customs duty and additional customs duty on imported cotton, and for allowing import of cotton through the Torkham Border.

The ECC was informed that Cotton remained duty-free till the slab of 0% was abolished in 2014-15 and Custom Duty of 1% was imposed along with 5% Sales Tax, said a press release issued by Ministry of Commerce here on Monday.

Later on, 1% slab was increased to 2% and then 3% along with 2% additional customs duty to make it 5%. Since 2017 the duties are withdrawn from January/February and re-imposed in July-August.

It was also discussed that by January 1st, 2010 the majority of the cotton would be lifted from the farmers. Therefore, to further protect the farmers, the ECC of the Cabinet allowed duty-free import of cotton with effect from January 15, 2020.

The ECC of the Cabinet was also briefed that under Rule 28 of the Plant Quarantine Rules of 1967 / Plant Quarantine Act 1976, cotton was only allowed through sea route. As trade with India is currently suspended by Pakistan, therefore, Afghanistan and the Central Asian States are the more viable economic sources for the import of cotton.

The ECC allowed import of cotton from Torkham Border subject to fulfilment of all sanitary and phytosanitary (SPS) conditions.

It also directed that necessary amendments shall be made in the Plant Quarantine Rules to allow import of cotton from land routes and establishment of fumigation arrangements at designated areas.

The ECC also desired that a comprehensive briefing may be given by the Ministry of National Food Security and Research on matters pertaining to cotton production for next cotton season.

The Adviser to the Prime Minister on Commerce was of the view that availability of cotton, especially the long-staple cotton, would facilitate the textiles value chain to maintain positive growth in exports, especially of value-added products.

It may be noted that during first five months of current financial year, i.e. July-November 2019-20, the value-added readymade garments have increased by 35%, knitwear by 6% and bedwear by 14% in quantity terms as compared to the corresponding period of the previous year.

Today’s decisions of the ECC will protect the farmers' interest and also ensure cotton availability for the value-added textile value chain.

The ECC also approved the Technical Supplementary Grant of Rs.6.210 billion during current financial year 2019-20 for recurring cost of Special Security Division North of Pakistan Army. Two other Technical Supplementary Grants were also approved for internal Security Duty Allowance to Pakistan Army (4.966 billion) and for the construction of Community Bunkers (Rs.500 million) by the ECC with the support from the Ministry of Defence.

ECC also allowed the Consortium with PPL as the operator and OGDCL, MPCL and GHPL as partners to submit the bid directly or through their subsidiaries in Abu Dhabi 2019 bidding round for one Block and make initial investment through their own resources in proportion to their shares, any additional financial requirement shall be met by the Government of Pakistan in case the need arises. The approval for bidding was given in view of enhancing the technical skills of the Consortium which is also working in Pakistan and for bringing the additional foreign exchange to the country.


Posted on: 2019-12-30T18:35:00+05:00