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Commerce Ministry to remove regulatory duty on basic raw material to reduce cost of production

Commerce Ministry to remove regulatory duty on basic raw material to reduce cost of production

ISLAMABAD: The Ministry of Commerce has proposed removal or reduction of regulatory duty on basic raw material and intermediate goods for the downstream industry.

The objective of this proposal is to reduce the cost of production and enhance Pakistan’s integration in the regional and global value chains.

The FBR had imposed regulatory duty on 731 items via SRO 1035 (I)/2017 issued on October 16, 2017 despite the fact that around 411 items were already subject to regulatory duty and the list contained some more items to bring under the ambit of the regulatory duty.

A well-placed source at commerce ministry told Customs Today that imposition of regulatory duty had enhanced the cost production of locally manufactured exportable products as cost of production depended on national and international variables.

Therefore, the source said that Pakistan exports faced many challenges like low market diversification and lack of introduction of modern technology by the business community which certainly affect cost of production.

However, the source said that MoC well aware of the fact keeps on taking various measures that are aimed at reducing the cost of production as well as enhancing competitiveness of Pakistani products in the international market.

In this connection, the source said that MoC had recently undertaken an exercise in consultation with the stakeholders to review the RDs imposed on various items and in result of consultative process commerce ministry proposed removal or reduction of RD on basic raw materials and intermediate goods for the downstream industry.

Furthermore, the source said that several other steps had been taken to enhance exports by reducing the cost of production of exportable products. In order to enhance export competitiveness, an Export Enhancement Package of PKR 180 billion for exporting business community would be effective till June this.  This incentive was revised further vide Economic Coordination Committee (ECC) of the Cabinet decision dated 6th October 2017.

Under this incentive 50% of the rate of incentive for the eligible textile and non-textile sectors already announced in the PM package would be provided on the same terms as for the period January to June, 2017 without condition of increment. While remaining 50% of the rate of incentive would be provided, if the exporter achieves an increase of 10% or more in exports as compared to corresponding period of the last year.