ECC scraps taxes, duties on cotton import: report

ISLAMABAD: The Economic Coordination Committee of the federal cabinet on Monday decided to withdraw the three percent regulatory duty, two percent additional customs duty and five percent sales tax on the imported cotton from January 15, 2020.

The decision was made by the ECC in light of the poor cotton crop output this year because of erratic rainfall and harsh temperatures, reported The News.

The ECC had met on Monday under the chair ofAdviser to the Prime Minister on Finance Hafeez Sheikh. In the meeting, the ECC was informed that cotton production was expected to be 10.2 million bales this fiscal year.

The original estimate for production had been 15 million bales, but rainfall and heat have slashed output by a quarter billion bales, according to the report published byThe News.

The meeting was informed that most of the cotton produced would be lifted from farmers before the year ends, and the new policy will not adversely affect the local farmers. The import would also facilitate the the exports of the textile sector.

"Availability of cotton, especially long staples, will facilitate textile value chain to maintain positive growth in exports especially of value-added products," Sheikh said at the meeting.

ECC also allowed the import of cotton from Torkham border through land routes from Afghanistan and central Asian states. Fumigation arrangements were allowed to be made at designated areas too.

Cotton import had remained duty-free till 2014/15, when customs duty of 1 percent and five percent sales tax were imposed on the industry. Later, the duty was raised to five percent.