Ceramic tiles industry in hot waters

October 12, 2015 Off By Web Desk

KARACHI: What seems to be negligence from part of Federal Board of Revenue (FBR), the ITP (Import Trade Price) has been further reduced to $1.82 per square meter to Iran, causing massive injury to the local ceramic tiles industry.

The ceramic tiles industry, which is a big revenue earner to the national exchequer, is already battling for its survival due to exorbitant cost of natural gas. FBR has also reduced the ITP on ceramic tiles import from China, Europe and Middle East, leaving no chance for the local industry to survive.

“Why the FBR is all out to ravage the ceramic tiles’ industry”, a local manufacturer lamented. The situation of dumping of Iranian and Chinese tiles has become horrible, which can be visualized that tiles worth around $2 billion just from Iran have been smuggled and dumped at godowns of Karachi and Lahore’s dealers and retailers, while situation of rest of the country’s outlets is not at all different,” manufacturers claimed.

Interestingly, these tiles have been imported under alleged wrong PCT heading 2713.200, attracting 10 percent duty, causing loss of billions of rupees to the national exchequer. The industry is facing problems because of energy crisis and law and order situation in the country. Besides, the government has levied two percent additional sales tax on locally manufactured tiles and resultantly, they are in disadvantageous position as compared with the imported tiles.

Moreover, the major threat to the local industry is smuggling and import of tiles at grossly under invoiced values, misdeclaration of description and clearance of goods under wrong PCT headings, attracting lower rate of duty.

The import data reveals that a large number of consignments of Iranian origin tiles were released in the price ranging from $ 0.60 to $ 0.16 per square meter as against $ 2.17 and above per square meter from China vide Valuation Ruling No 518/2013. However, there is no current Valuation Ruling for Iranian tiles.