TNAG-0391-FCO40-437-Restriction-on-cotton-textile-exports-from-Hong-Kong-to-the--1973 — Page 106

(c) Turkey

9.

Rs. 20.20;

10 lb of raw cotton at Rs. 2.02 per lb: Conversion cost at Rs 0.60 per 1b: Rs 6.00; Depreciation on machinery etc: Rs. 2.00; Cost of 10 lb of yarn: RS. 28.20

When exported the return is:

Average C & F Hongkong:

Less freight:

Realisable price:

£57 per bale of 400 lb; £4;

£53 per 400 lb;

Realisable value in Pakistan currency: RS 604.00; Bonus receivable at 35%: Rs 211;

If sold at a premium of Rs 190, Rs 400.00 approx. Total receipts:

Rs 1,004.00 per bale of

400 lb;

Whereas the cost comes to Rs 28.20 per 10 lb; Less the value realised from export: RS 25.10; Loss on sale of cotton yarn: Rs 3.10 per 10 lb."

The Export Drawback system, dating from 1964 is designed to relieve exporters of manufactured and some processed goods of the internal taxes and charges element of their export (FOB) prices. These are, specifically (according to the current Decree, published in August, 1970) -

"Production"/"Turnover" Tax on the product's

constituents, including that on power, fuel imported materials. "Production"/"Turnover" Tax on the product itself (if any) may either be separately refunded or made the subject of a pre-manufacturing waiver.

Import Duty on materials and auxiliaries.

Services Tax on banking and insurance

transactions, on transportation and on Post Office services.

Income Tax on salaries.

Stamp and other duties on customs declarations, receipts, invoices and other documents, etc.

The

Originally, the rates of drawback were fixed on an individual item/producer basis but this system involved long and frustrating delays, six months being not at all unusual. Later, rates were fixed by Decree on a product by product basis. This involved several hundred different rates and procedures were complicated. present system was introduced as part of the 1970 devaluation "package", Products are divided into six categorics with drawback rates ranging from 10% to 40% (of FOB prices); but these rates range from nil to 30% if the value of the exporters shipments (of goods on the three principal "drawback" lists) aggregated less than $1mm. in the calendar years 1970 and 1971 and less than $1.2mn. in 1972. The minimum shipment figure was increased by a further $0.2mm. to $1.4mn. in 1973.