Import of cotton: government all set to withdraw ST, customs duty

The govt. is all set to withdraw sales tax and customs duty on import of cotton to encourage value addition, reduce cost of doing business and bridge the gap between production and consumption. Textile Division has submitted a summary to the ECC of the Cabinet, which is expected to be considered very soon. Import of cotton has remained duty free till the slab of 0% was abolished in FY15 and customs duty (CD) of 1% was imposed along with the 5% sales tax. Later on 1% slab was made 2% and then 3% along with the 1% additional duty to make it 4% ie cotton was subject to 4% CD and 5% sales tax till Jan. 15th, 2017. The FBR has no objection to withdrawal CD. However, under the prevailing law, changes prescribed under First Schedule to the Customs Act, 1969 can only be made through an Act of Parliament.