RD on export of copper scrap caused shortage

Severe shortage of brass in domestic market is seen due to the Federal Board of Revenue’s wrong decision of by partially imposing 25 percent regulatory duty on export of only waste and scrap of copper (excluding brass).

In a presentation to Prime Minister, Finance Ministry, Commerce Ministry and FBR, Atif Iqbal, Executive Director, Organization for Advancement and Safeguard Industrial Sector (OASIS) apprehended that in the current budget (2018-19), the FBR has ‘erroneously’ imposed 25 percent RD on export of waste and scrap of copper only (Pakistan Customs Tariff heading 7404.0090) which is an anomaly. This duty is absolutely insufficient and does not have any impact on export of brass from Pakistan leaving this industry at the mercy of exporters’ mafia again. Resultantly, the prices of brass scrap have again started to shoot up and shortage of brass has occurred in the local market due to re-starting of export of brass from Pakistan.

It was proposed that to either impose a complete ban on export of brass & copper as raw material, ie, without value addition or impose heavy regulatory duty on such exports to help the local industry survive by being competitive nationally and internationally. The resultant exports of finished goods also promise millions of dollars in foreign exchange easing out the balance of trade, Atif Iqbal added.

All Pakistan Brass Water Fittings Manufacturers Association has strongly apprehended that Prime Minister should save this industry from complete shut down and issue necessary instructions to FBR to consider our case in anomaly committee and make necessary rectification by inserting all the above sub-heads in the SRO 645(I)/2018 so that complete protection may be ensured to the Brass Water Fittings Manufacturing Industry.

Since Brass is an alloy of copper and exported in different shapes under various sub-heads of chapter 74 therefore, proposal was made for imposition of heavy duty or ban on export of both “Copper and Brass” exportable under chapter 74.

The OASIS has also taken up the matter with the Federal Board of Revenue (FBR) to review RD regime on export of brass through Finance Bill 2018.

Executive Director OASIS explained that it is really a matter of deep concern that the local manufacturers of sanitary fittings in Punjab are facing severe problems due to shortage of brass and some units are likely to close down their factories due to this very threat. Most of them are working in the category of cottage industry whose bread and butter are solely dependent on their day-to-day production. The local manufacturers have approached OASIS and requested to raise collective voice to reach the ears of concerned quarters. Since the primary objective of OASIS is to work for the protection of domestic industry and the employment associated therewith; therefore, it is making this very request on behalf of All Pakistan Brass Water Fitting Manufacturers Association (APBWFMA) as a gesture of unity and commitment.

The local manufacturers of sanitary fittings consume major quantity of brass/copper scrap (scrap) as their primary raw material and produce contemporary sanitary fitting products after making substantial value addition. There are tens of thousands of households associated with this industry directly and indirectly. This industry is also making import substitution of millions of US dollars every year and has every potential to export sanitary fitting products to rest of the world. The manpower engaged in this industry ranges from small individual entrepreneurs (cottage industry) to medium-sized and organized large-scale industry, Executive Director OASIS added.