KARACHI, Feb 2: Children garments and shoes from China and Thailand have become costlier by 20 per cent in the local market as the Customs is demanding duty on higher valuation per kilogram and not per dozen.
An importer and retailer of these products in Hyderi Market and North Nazimabad, who asked not to be named, said that the Customs had introduced this valuation formula on the eve of Eidul Fitr in 2007 and as a protest the dealers had not cleared the consignments. Later, after an understanding 50 per cent consignments were cleared on dozen basis and 50 per cent on kg basis, he added.
He said that the Customs was now demanding Rs120 per kg for garments and shoes consignments, which were cleared at Rs250 per dozen ahead of last Eidul Fitr.
However, he said that imports had also become costlier after depreciation of rupee against the dollar and increase in value of Chinese yuan and Thai baht. He noted that the import of readymade garments and shoes had not yet affected drastically.
Giving reasons, he said that the retailers/importers, who sell locally-made items, were also placing orders for imports since the load-shedding had created problems for the suppliers of locally-made garments.
He added that the retailers used to clear the samples, provided by the manufacturers of locally-made garments, by January for summer season so that they could get the delivery by February. Now many retailers had not placed orders as the suppliers faced problems in maintaining the production owing to loadshedding.
President of Tariq Road Welfare and Traders Association Siddiq Memon gave a different story claiming that import of Chinese and Thailand readymade garments, shoes and unstitched cloth had been very negligible for the last one month after change in Customs duty and valuation formula. Rising freight charges have also made imports costlier, he added.
He said that in 2007 some 3,200 containers had arrived at the port worth of $180 million, which included 2,000 and 1,200 containers of winter and summer wear, respectively.
He further claimed that after rising cost of imports, smuggling of garments had increased as containers loaded with Chinese items found their way into Pakistan through land routes under the garb of Afghan Transit Trade (ATT).
These containers were being released after paying Rs200,000 as duty per container.
The same consignments were also being brought by the traders of Lahore and Peshawar but they were saving Rs700,000 per container in terms of duty.
He said that the Customs was demanding $3.65 per kg as per new valuation as compared to $1.60 per kg ahead of last Eidul Fitr. Importers with the new increased valuation procedure are now paying Rs900,000 as duty as compared to Rs600,000 before Eidul Azha and Rs300,000 ahead of Eidul Fitr.
He added that the Customs ahead of Eidul Fitr had held up 670 containers worth of Rs4.5 billion on last Eid al Fitr, which were later released on 21st of Ramazan after fixation of valuation at $3.60 per kg.
The total worth of a 40 ft container loaded with shoes and garment now comes to $45,000-50,000 as per new enhanced valuation as compared to $15,000-18,000 ahead of Eidul Fitr.
“Interestingly, there is no notification yet from the FBR on the increase in valuation rates,” he said adding that the duty formula on dozen basis had been in vogue for the last eight years.
China enjoys 80 per cent market share in children garments in Pakistan followed by Thailand and local producers’ 10 per cent each. In children shoes, China virtually rules the market by 90 cent share while in gents suiting China holds 50 per cent market share followed by Thailand 30 per cent and 20 per cent by locals, he added.