ECC Approves Withdrawal of Duty on Imported Cotton

The Economic Coordination Committee (ECC) of the Cabinet has approved two cases submitted by the Ministry of Commerce, which were 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 a customs duty of 1% was imposed along with a 5% sales tax. Later on, the 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Since 2017, the duties are withdrawn from January-February and re-imposed in July-August.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 taken from the farmers. Therefore, to further protect the farmers, the ECC allowed duty-free import of cotton with effect from January 15th, 2020.

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

The ECC allowed import of cotton from Torkham Border subject to fulfillment of all sanitary and phytosanitary (SPS) conditions. It also directed that necessary amendments shall be made in the Plant Quarantine Rules to allow the import of cotton from land routes and the establishment of fumigation arrangements at designated areas.

In addition, a comprehensive briefing may be given by the Ministry of National Food Security and Research on matters pertaining to cotton production for the next cotton season.

The Advisor to the Prime Minister on Commerce was of the view that availability of cotton, especially the long-staple cotton, would facilitate the textile industry’s value chain to maintain positive growth in exports, especially for value-added products.

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

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