Leather industry faced problem for ACD 2%

The Chairman Pakistan Tanners Association (PTA) in a statement issued today on earlier PTA instance and mutual understanding made with MOC the 3% Custom Duty on import of basic raw materials for leather industry such as raw/wet blue / pickled of cow, buffalo, goat and sheep skins has been announced to be removed in the Federal Budget for the year 2018-19 while during a meeting held with MOC by PTA delegation it was clarified categorically that Additional Custom Duty (ACD) which has been increased from 1% to 2% would automatically be removed being the integral part of Custom Duty at the time of issuance of concerned SRO in compliance with custom prescribed procedure.

Mr. Amanullah Aftab, Chairman, PTA also shared the important facts that the removal of ACD has ONLY been made for RAW cow, buffalo, sheep and goat skins under one HS code 4101.2000 leaving major HS codes for the desired/agreed exemption for import of wet blue leather for cow, Buffalo, sheep and goats skins which is still imposed ACD 2% vide SRO # 630(1)/2018 dated 24.05.2018 which is repugnant to the understanding already made with MOC during meeting and aspiration of the exporters. It is afraid that this imposition of ACD at 2% on these basic raw materials where relief was given in CD from 3% to zero will negate the effect of relief given in CD so practically there would be no relief to the basic raw materials of leather industry which is struggling and exports are dropping and many tanneries have closed and are further closing down. 

The Chairman, PTA, Mr. Amanullah Aftab also shared his apprehension that if it was omitted for the inclusion of major H.S. Codes for basic raw materials for the leather industry I.e. Wet blue leather for cow, buffalo, sheep, goat skins INADVERTENTLY at the time of issuance of SRO concerned then it immediately needs to be rectified by MOC to avert the anomaly under serial no. 128 to 144 of 5th Schedule of the Customs Act, 1969 for the exemption of 2% ACD. He also shared that another anomaly is also on import of fundamental basic Chemicals which were zero rated for CD but ACD at 2% is still being charged which are prevailed under serial # 109 to 115 of 5th Schedule of Custom Act 1969. This also negates the relief given in CD to the struggling finished leather industry. 

Details of remaining H.S. Codes for wet blue leather for cow, buffalo, sheep and goat skins with serial # 128 to 144 of the 5th schedule are as follow for necessary rectification :-



5th Schedule Serial Number         HS CODE


128                                                         4104.1100

129                                                         4104.1900

130                                                         4104.4100

131                                                         4104.4900

132                                                         4105.1000

133                                                         4105.3000           

134                                                         4106.2100

135                                                         4106.2200

136                                                         4106.4000     

137                                                         4106.9100

138                                                         4106.9200

139                                                         4107.1100

140                                                         4107.1200

141                                                         4107.1900

142                                                          4107.9100

143                                                         4107.9200

144                                                         4107.9900


Basic Chemicals with CD 0% but ACD 2% imposed in SRO


5th Schedule Serial Number         HS CODE


109                                                         3201.1000

110                                                         3201.2000

111                                                         3201.9010

112                                                         3201.9020

113                                                         3201.9030

114                                                         3201.9090

115                                                         3808.9220


The Chairman, PTA articulated for prompt inclusion of all above remaining H.S. Codes for wet blue leather for cow, buffalo, sheep and goats skins and some basic tanning chemicals for the exemption of 2% ACD in line with the exception of Custom Duty already allowed in the Federal Budget for the year 2018-19 for the facilitation to this 2nd export oriented sector of the country which is already with severe clutches of recession and to arrest the declining trend of Finished leather sector exports to the desired extent. 

At the conclusion Mr. Amanullah Aftab appreciated all assistance extended as yet by MOC and rest of Ministries of the government for facilitation to the leather sector of Pakistan and very optimistic that anomaly would be removed with the inclusion of all above remaining H.S. Codes for 2% ACD without delay in view of the gravity of the matter and situation so that our member exporters would be saved from unnecessary financial burden which ultimately be affected to the production cost which is already on higher side as compared to neighbouring  competing countries particularly Bangladesh and India in our region and Argentina, Brazil in South America. 



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