Import Cost Of Secondhand Clothes Jumps Fivefold.

Import cost of secondhand clothing has increased fivefold following imposition of additional sales tax (ST), rise in income tax and customs duty, importers said Thursday.

The double-digit inflation in the country has dragged import of secondhand clothes down to more than 50 percent during September-February 2011 to Rs 558 million.

Through SRO-509 on March 15, 2011, the Federal Board of Revenue imposed 17 percent sales tax, increased income tax by 5 percent to 6 percent and 5 percent customs duty on imports, patron in chief Pakistan Secondhand Clothing Merchants Association (PSCMA), Muhammad Usman Farooqi said.

He said the secondhand clothing import was exempted from sales tax earlier—but after imposition of sales tax and increase in income tax and customs duty rates, import cost of one container now comes to Rs 18,500, “which was Rs 14,000 before changes in taxation,” Farooqi added. “Around 100,000 workforce is involved directly and indirectly in this trade besides the poor segments of the society will face huge price hike for clothing,” he maintained.

The import of secondhand clothes from Europe, USA, Japan, Korea and Australia during the same period last year stood at around Rs 785 million.

“Despite increase of import trade price (ITP) from 30-35 cents per kg to $2 cents per kg on imports, import volume has shrunk slightly,” president of PSCMA, Saleem Vakani said.

“Similarly, we have to pay 0.39 euro per kg and 17 cents on one pound on the imports from USA and Canada,” he told.

He further said due to high exchange rates and presence of Indian importers in the European and other markets “we face a high import price of every commodity.” “Indians offer the buyers better rates than ours as they have better dollar-Indian rupee exchange rate than us,” he added.

Consumption of secondhand clothing mainly in lower and lower middle class segment has also gone down to some 45 percent in all four provinces during this period due to inflation and falling living standards and rising utility bills cost etc.

Import of secondhand shirts, trousers, sweeter and pullovers etc is furnished from, USA, UK, Japan and other European states while blankets, carpets, rugs, shoes, overcoats, jackets and cloth made toys are imported from Korea, Japan and China.

“Some 50 percent warm clothing including blankets, shawls and overcoats are consumed in NWFP and northern tribal areas while Punjab consumes some 35 percent of the total imported stuff’, he said.

“We import some 50 percent secondhand stuff from USA, Canada and other European countries while the remaining 50 percent imports are from Korea, 20 percent from Japan and remaining from other states,” he added.

He said Quetta comes third in the consumption of warm clothing while Karachi is the main consumer of US and Canadian trousers, shirts, T-shirts, Korean and Chinese draperies besides all other imports. He said dealers from major cities in cold zones lift the stuff including warm clothing during the months of July to December every year, “which comes to 50 percent of our total imports.”

He said the Pakistani importers lift third-grade material as the first grade of secondhand material is sold in the markets of these countries while India on better rates lifts the second-grade stuff and most of the remaining material is lifted by the Pakistani importers.

“Flat rates stand at around $395 to $445 on US imports but Indian importers offer better rates even on zero-rated commodities,” he said.

Source : dailytimes.com.pk