JavaScript seems to be disabled in your browser.
You must have JavaScript enabled in your browser to utilize the functionality of this website.

News Clips 22 November, 2014

[ Textile exports down by 1.54pc in 4 months ]
[ Fake drawback claimants warned of harsh penalties ]
[ October textile exports up 6.5 percent YoY ]
[ Indian cotton yarn making inroads into local markets ]
[ No penalty for late filing of returns ]

Textile exports down by 1.54pc in 4 months   [ top ]

The Nation, November 22, 2014

Pakistan’s textile exports while continuing downward journey had declined by 1.54 percent during four months (July to October) of the financial year 2014-15 mainly due to the deteriorated power crisis prevailing in the country.

The country has exported textile made goods worth of $4.6 billion during July-October 2014-2015 as against $4.7 billion of the corresponding period of the previous year registering decline of 1.54 percent, according to the Pakistan Bureau of Statistics (PBS). Textile sector of the country is confronting with longstanding issue for last few years, which resulted in less exports of the textile sector despite Pakistan received GSP plus status from the European Union. The government was anticipating enhancing country’s exports by $1 billion annually following getting GSP plus status. However, things moved in opposite direction, as exports plunged in last several months mainly due to the ongoing energy shortage. The country’s overall exports have shrunk by 6.86 percent in July-October to $7.98 billion from $8.56 billion of the corresponding period last year.

However, the government seems unable to address the business community problems in short-run, as it could not provide gas to the textile units due to scarcity of gas in the country despite Prime Minister Nawaz Sharif had taken notice in this regard. A high-level committee constituted by premier under the chair of Finance Minister could not make consensus regarding supplying gas to the textile industries. The government believes that domestic consumers would face worsen gas loadshedding if it provided to industries in winter season. Sources in All Pakistan Textile Mills Association (Aptma) informed exports would further decline in next three four months due to the unavailability of gas to the textile units.

“Industry is apprehended to lose a total of $2.5 billion exports in case the industry remains non-operational during winter”, said a representative of the Aptma. He added that such a situation would create havoc in the industry, as it would inflict negative impact on the country’s exports. 

According to the PBS figures, textile exports had recorded increase of 6.51 percent in October 2014, as it registered at $1.18 billion in last month against $1.11 billion of the corresponding period last year. 

The PBS data showed that export of raw cotton registered a negative growth of 8.28 percent, cotton yarn 17.1 percent, cotton cloth 15.64 percent, cotton carded or combed 96.06 percent, yarn 13.36 percent and bed wear 0.72 percent. Meanwhile, following of the commodities recorded positive growth: knitwear 10.89 percent, towels 4.23 per cent, tents, canvas & tarpaulin 159 percent, readymade garments 8.11 percent, art, silk & synthetic textile, 33.42 percent, madeup articles 1.77 percent, other textile materials 13.78 percent during the four months of 2014-2015. 

Meanwhile, according to the data, the country had spent $1.21 billion on exporting food commodities during the month of July-October 2014. The break-up of food group showed that following food commodities have recorded negative growth: rice 4.23 percent, fruits 12.2 percent, vegetables 41.73 percent, pulses 100 percent, tobacco 17.64 percent, wheat 100 percent, oil seeds, nuts and kernels 24.59 percent, meat and meat production 13.07 percent, and all other food commodities 13.29 percent during the period under review. However, spices recoded growth of 13.83 per cent sugar 122.52 percent.

According to the Pakistan Bureau of Statistics, the country had spent $5.07 billion on importing oil during four months of the current financial year, which is 1.79 percent lesser than the imports of same period of last year. The break-up $5.07 billion showed that country imported petroleum products worth of $3.19 billion and petroleum crude $1.88 billion. 

Fake drawback claimants warned of harsh penalties   [ top ]

The News, November 22, 2014
KARACHI: The textile ministry has warned the fake claimant to duty drawback of severe penalties.

The ministry, in an order ‘drawback of local taxes and levies 2014-15’, said such exporters will be liable to a penalty of 100 percent of the claim in addition to the reversal of the claimed amount.

The order said a textile association found involved in verifying/recommending false and fraudulent duty drawback claims will be stripped off its privileged of recommendations.

It may be mentioned the textile associations are responsible for certifying the authenticity of information provided by the exporting unit pertaining to the registration with the ministry and the application for claims.

According to the ministry, an association needs to exercise due diligence to ensure authenticity of the documents, while only notified executive members of the association will be eligible for verifying the claim documents.

The drawback will be available on an annual basis on freight on board-realised value of enhanced exports for the shipments made during the last fiscal year; if the value is beyond 10 percent over the preceding year’s exports.

The export performance will be analysed separately for each category of eligible products.

The drawback will be provided to manufacturing-cum exporting units on exports of products under the specific tariff codes of the Pakistan Customs Tariff, the official document said.

It further said all units, availing the drawback, should be registered with the ministry of textile industry as sole proprietor, partnership or company, and should be a member of a textile association registered with the directorate of trade organizations, the ministry of commerce.

A qualified exporting unit will receive the payment from an authorised bank within 24-hour day as per the approval by the SBP Banking Services Corporation.

The admissible incentive payment as approved by the field office of SBP-BSC will be made by crediting the account of the authorised bank, which would pay the amount to the exporting unit within 24 hours thereafter.

The receipt of incentive payments should properly reflect in the books of accounts or balance sheet of the exporting unit, while the ministry reserves the right to conduct periodical, random, on-the-spot checks and audits to verify the claims filed and drawbacks received.

The State Bank of Pakistan will be the appellate authority for penalties on units, said the order.

October textile exports up 6.5 percent YoY   [ top ]

Business Recorder, November 22, 2014
The country's textile exports have witnessed an increase of 6.51 percent during October 2014 as compared to the corresponding period of last year, according to the data released by Pakistan Bureau of Statistics here Friday. The provisional data on external trade for the first four months of current fiscal year, released by PBS, showed that the total textile exports were recorded at $1,180 million in October 2014, up by 6.51 percent over $1,108 million for the same month of last fiscal year. 

Detailed analysis of the commodities showed that nine textile products witnessed positive export growth among all textile and clothing categories in October 2014 as compared to October 2013, which included Knitwear that witnessed positive growth 10.52 percent to $209 million in October 2014 over $189 million same month of the last year. A growth of 28 percent in export of readymade garments was recorded during the period under review, rising from $140 million in October 2013 to $179 million in October 2014. 

Export of bed wear witnessed growth of 7.06 percent in October 2014 against the same month of last year as it raised from $163 million ( October 2013) to $175 million October this year. Export of made-up articles surged by 24.03 percent to $56 million in October 2014 over $45 million during same period of last year. A growth of 56.08 percent was recorded in the export of raw cotton in October 2014 as total raw cotton exported during the period was recorded worth $24 million in October 2014 against $15 million during same month of the last year. During the period under review the export of towel from the country surged by 4.22 percent, rising from $66 million (October 2013) to $69 million October 2014. Export of cotton yarn, cotton cloth, cotton corded and yarn other than cotton yarn recorded a negative growth by 1.81 percent, 22.31 percent, 98.22and 25.59 percent respectively in October 2014 over the same period of last year. 

However, the export of textile products recorded negative growth of 1.54 percent in first four months (July-October) of the current fiscal year, lowering from $4,667 million (July-October 2013-14) of $4,595 million this year. On monthly basis the export of textile products witnessed negative growth of 5.96 percent, as it was $1,255 million in September 2014 which decreased to $1,180 million in October 2014. 

FOOD GROUP The food products export increased by 8.66 percent in October 2014 over same period of last year as it was recorded at $33 million in October 2014 over $32 million during the same month of last fiscal year. However, the food products witnessed negative growth of 5.89 percent in July-October 2014-15 over July-October 2013-14. 

Main commodities of imports during October, 2014 were petroleum products (Rs 76,435 million), petroleum crude (Rs 48,608 million), palm oil (Rs 16,471 million), medicinal products (Rs 15,916 million), plastic materials (Rs 14,138 million), iron & steel (Rs 14,096 million), aircraft, ships & boats (Rs 13.553 million), electrical machinery & apparatus (Rs 12,420 million), power generating machinery (Rs 10,961 million) and fertiliser manufactured(Rs 10,006 million). 

Indian cotton yarn making inroads into local markets   [ top ]

The News, November 22, 2014
LAHORE: Indian cotton yarn exporters are fast making inroads into Pakistan as local spinners are distraught with increasing power shortages and high tariffs, industry official said on Friday.

Cotton yarn imports from India jumped 53 percent to 25,700 tonnes in the last year, said SM Tanveer, chairman of All Pakistan Textile Mills Association (Aptma).

He said the domestic market consumes around 75 percent of the yarn produced by local spinners, while only the remaining 65,000 tonnes are exported every month.

“Prior to energy crisis, Indian yarn exports were limited to polyester yarn,” Tanveer said. “As far as the cotton yarn is concerned, it never posed threat to the local industry even when its imports were allowed at zero duty. Now when five percent duty is imposed on yarn import, the flow of Indian cotton yarn in Pakistani market has increased.”

The main reason for this surge is the unavailability of power to 70 percent of the textile units located in Punjab, which has been operating at 66 percent capacity during the past one year due to power shortages. High power cost has also eroded the compatibility of local yarn.

Aptma chief said the liberal import regime has also facilitated import of Indian yarn in the Pakistani market. The import duty of yarn is five percent and there are no other import levies. In India, the import duty on yarn is 10 percent, 12 percent special central excise, three percent education cess and six percent natural calamity duty. Because of this high duty structure, the yarn import in India is zero. 

Group leader Aptma Gohar Ejaz said India exported 16,700 tonnes of cotton yarn to Pakistan in 2012-13 fiscal year.

He said an average import of cotton yarn from India has hit over 5,000 tonnes/month. Faisalabad market is flooded with Indian cotton yarn. The government would have to take immediate steps to control this trend. Ejaz said Aptma central chairman has already asked the federal textile secretary through a letter to impose reciprocal duties on import of yarn from India.

Instead of singling out India, Pakistan should change its MFN (most favoured nation) tariff on yarn in line with the Indian tariff.

Planners in Pakistan know that India is the only country from where yarn could be imported at competitive rates. Similarly, Indian planners were fully aware that the threat of yarn import in India would arise from Pakistan, and therefore they have already taken measures to curb the import. Pakistan should now take similar measures to curb imports, textile leader advised.

Logically, the major cotton yarn imports from India should have been fine count yarns. India enjoys the advantage of producing long staple cotton. To produce fine count yarn, Pakistan has to import yarn from US and other countries. Fine yarn is of great importance for Pakistani textile industry. This yarn is used to weave ladies yarn and cambric – a finely woven cotton fabric – that is very popular locally. This year the fine lawn market is worth over Rs400 billion.

Recalling the quality of imports, Ejaz said it was surprising that more than 50 percent of the cotton yarn was of lower counts from 8-25 counts.

This quality is used in making of towels and other home textile material. “If this trend is not checked, we may end up with an accelerated import of cotton fabric also from India,” he warned.

No penalty for late filing of returns   [ top ]

Dawn, November 22th , 2014
ISLAMABAD: Finance Minister Ishaq Dar on Friday waived payment of penalty for late filing of income tax returns till Dec 5.

As the date for filing of returns expired on Nov 21, the FBR did not extend the date. However, penalty and default surcharge would not be levied, if returns are filed up to Dec 5, after which penalty and default surcharge be levied from Nov 22, said FBR spokesperson Shahid Husain Asad. The decision had been taken to facilitate taxpayers, he added.

A statement of the FBR said that a number of representations were received from Pakistan Tax Bar Association, Pakistan Tax Advisers Association, FPCCI, various chambers of commerce and industry and other various professional/business/trade bodies, requesting extension in the date of filing of returns.

The last date was extended thrice between Aug 31 and Nov 21. FBR has asked all taxpayers to file their returns as early as possible to avoid legal action.