All Pakistan Textile Mills Association (APTMA) has demanded that finished cotton fabric falling under Chapter 52 of the Pakistan Customs Tariff be excluded from the Export Facilitation Scheme (EFS) to ensure a level playing field for the local industry.
According to sources, in a letter addressed to the Chairman of the Federal Board of Revenue (FBR), APTMA referred to SRO 1435(I)/2025 dated August 5, 2025, under which cotton, cotton yarn, and grey cloth were excluded from the EFS. Sources said that after the exclusion of grey cloth, some irresponsible importers started bringing in semi-finished or partially processed grey cotton fabric to undermine the original objective of excluding these items from the scheme.
The letter stated that this practice has severely harmed the local upstream industry because items imported under the EFS remain zero-rated, while identical products manufactured locally are subject to an 18 percent sales tax. According to them, this difference has clearly created an unequal playing field for the local industry.
Sources said APTMA noted that the misuse of concessions provided under the EFS and misdeclaration of imported items had already been raised with the FBR in a letter dated December 11, 2025. That letter highlighted that grey cotton fabric was still being imported under various alternative names, including terms like “ready for dyeing.”
According to sources, the association expressed regret that despite highlighting the issue, the import of grey fabric through misdeclaration continues unabated. To address this situation, APTMA proposed that all types of finished cotton fabric under Chapter 52 of the Pakistan Customs Tariff be completely excluded from the EFS.
APTMA emphasized that immediate and effective measures are essential to protect the local textile industry from the pressure of large-scale imports of cotton fabric.
