A spokesman for the association said that the tile industry can grow and become export-oriented industry, if the government supports it to make local tiles internationally competitive. Owing to high input costs including recent hike in gas prices (Rs 600 to Rs780 per mmbtu), locally produced tiles are finding it hard to compete in local and global markets, said the spokesman.
He said the huge influx of smuggled tiles and imports at lower valuation, which capture approximately over 40 percent of the country's tile market, is hurting local manufacturers as well as government's revenue. He said the government's intention to take various business friendly measures like cut in duties and developing a national tariff policy to remove anomalies in the existing tariff structure will certainly help Pakistani economy grow.
"We have already highlighted that the current ITPs are unrealistic and serve to encourage imports and these should immediately be reset back to 2004 levels. On Comparison of ITPs between the year 2004 and existing (prevailing from June 2016), it shows that the ITP has decreased for most of the tile sizes ranging from 5% to 35%," said the spokesman.
The spokesman added one floor tile (Porcelain Tiles) up to 60X60 CM (i.e up to 24"x24") has the price undertaking of $5.25/sqm with current ITP of $4.90/sqm. "It is quite evident from this example that the price undertakings are set as per the ITPs and the benefit of anti-dumping duty has not been transferred to the local tiles manufacturing industry," reasoned the spokesman.
He added that majority of the imports from China are being cleared based on the price undertaking and impact of anti-dumping duty has not benefited the local industry, therefore, price undertaking option should be abolished. Moreover, added the spokesman, sales tax charged to tiles industry is 22% including 17 percent GST and 2 percent extra sales tax as per SRO 896/2014 while 3 percent further tax is charged on sales to unregistered.