Customs slashes yarn valuation to encourage imports

KARACHI: Pakistan Customs has lowered the valuation on yarn imports following downtrend in international prices and the decision is likely to reduce duty and taxes in line with demand of textile sector, sources said on Saturday.

The sources said the customs authority lowered the valuation of metallic yarn and the Directorate General of Customs Valuation issued the revised valuation ruling earlier this week for determination of duty and taxes at the time of consignment clearance.

Previously, the directorate issued the valuation ruling related to metallic yarn in November 2016. The previous ruling was more than four years old and values of subject goods both in the international and local markets had been showing varying trends.

Previously, the custom value was fixed at $ 7/kg. As per the latest revision, the values have been reduced to $5.45/kg, $6/kg and $5.05/kg on import from UAE, Japan and other regions, respectively.

However, the directorate maintained the customs value of the commodity on import from China at $4/kg.

In the previous ruling the value was fixed on import from India. However, customs value on import from India has been deleted due to imposition of import ban.

The revision was also made on the basis of various representations received from the stakeholders, according to the directorate.

The directorate conducted a number of meetings with Pakistan Yarn Merchants Association and other leading importers of the commodity to review the import value.

In the review meetings, the stakeholders told the directorate that the values in international markets had shown a downward trend due to COVID-19. Customs valuation was very high on import other than China and India, they said.

More than 97 percent of imports during fiscal year 2019/20 were from China, UAE and India with values ranging from $4 per kilogram to $4.2/kg whereas for ‘other’ origin the values are $7/kg – 75 percent higher.

They also raised the issue regarding import of the commodity from India, which was banned by the government since August last year.

“With the bank on import from India, the importers are now forced to buy goods, only from China or UAE as valuation ruling prescribed almost 75 percent higher values for other origins which never happens in any business,” said an industry official.

The directorate also considered the issue raised by the importer regarding imports of Indian origin yarn from transit ports like Dubai.

After considering all aspects, the directorate decided to reduce the customs value of metallic yarn on import from UAE, Japan and other regions.