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pAKISTAn’S FIRST InDepTH newSpApeR on cuSToMS
vol 2 Issue no. 03
Karachi, Tue Feb 04 - Mon Feb 10, 2014
weekly
Regd. no, Mc-1381
Price Rs. 50.00
LAHORE
RevIewIng SRos
M HAYAT
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Finance Minister Ishaq Dar reiterates the resolve to review the Statutory Regulatory Orders (SROs) with the aim to make decisions with collective wisdom in national interest | See pAge 03 | noRMAlISIngTRADeTIeS
akistan Customs performance is linked to creation of a level playing Pield for business, trade and industry within the country. This was stated by Federal Board of Revenue Chairman Tariq Bajwa while addressing the gathering after Plag hoisting ceremony on International Customs Day at Customs House, Lahore. He said that absence of proper communication system badly affects overall performance of any organization. “Without communication an organization cannot perform effectively. In order to perform optimally you must have a robust communication system,” the chairman said while addressing the customs ofPicers. “We lack communication with the businesses”, he regretted. He said that Prime Minister Nawaz Sharif’s vision is to make Pakistan a trade and transit hub in Central and South Asian regions. For this purpose
Normalising trade ties with India could boost up Pakistan’s exports up to three times in a short time, says Commerce Minister Khurram Dastgir | See pAge 02 | ReTRIevIng KpT lAnD
Kamran Michael says that 70 acres of land has been retrieved from the mafia and Chairman KPT will continue the same operation against encroachments | See pAge 02 | ReAFFIRMIng ReSolve
The objective of celebrating Int’l Customs Day is to exhibit the preparedness and determination towards eliminating crime and generating revenue, says Member Customs | See pAge 06 |
The plan is going to be finalized and Finance Minister Ishaq Dar is very keen to translate this vision into reality and at the backbone of this system, there is going to be a very effective communication strategy. we have come up with an Integrated Transit Trade Management System. All information, from entry to exit point, will be communicated in real time, Bajwa informed, adding that this system will help match the information of the goods in the containers at the time of entry with the information at the time of exit from any border area in Pakistan including Karachi, Torkham, Chaman and Wagha. “The plan is going to be Pinalized and Finance Minister Ishaq Dar is very keen to translate this vision into reality and at the backbone of this system, there is going to be a very effective communication strategy,” the
— Exlusive Customs Today photo
chairman elaborated. Tariq Bajwa stated that Pakistan Customs Chief Collector had visited India recently to improve communication and cooperation as India desired to utilize Wagha Border trade facility to its optimum capacity. However, the role of the Commerce Ministry is of prime importance while and the FBR/Customs will facilitate it,” he elaborated. “It is need of the hour to develop and upgrade Customs stations on borders to ensure speedy and efPicient clearance of transit goods,” the FBR chairman declared categorically. While explaining the importance of customs, he said, Customs Department anywhere is custodian of the economic frontiers of a country. “If Pakistan Customs does not perform its job efPiciently and effectively, we will not be able to create a level play-
ing Pield for business, trade and industry within Pakistan. In such scenario, genuine traders and industrialists cannot compete with the smuggled goods where customs duties are not paid,” the chairman pointed out. Tariq Bajwa elaborated that the less growth was mainly due to high percentage of non-dutiable imports, citing that 66 percent of the imports were non-dutiable because of FTAs (Free Trade Agreements), PTAs (Preferential Trade Agreements) and zero rating. Only 34 percent imports were being levied and their statistics have shown only 2 percent growth in terms of rupee that’s why the growth in Customs target is yet to be achieved, he said and added that strenuous efforts were underway to achieve the target in the remaining half of the current Piscal year.
Earlier, addressing the Customs ofPicers, he underscored the need for putting in order effective and stringent measures to curb under-invoicing and smuggling, citing that it would dePinitely help create a breathing space for the local industry. He said that Customs Department was eminent in the collection of revenues that made the country's economic indicators healthier and ultimately led to progress and prosperity of the country. Later, the FBR chairman distributed the appreciation certiPicates to the Customs ofPicers and ofPicials having shown remarkable performance. On the sidelines of the ceremony, the chairman while giving answer to an important question told Customs Today that betel leaf scam was being investigated but the process would take some time.
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NATIONAL
FEBRuARy 04 - FEBRuARy 10, 2014
Sri lankan customs clutch 4m hidden cigarettes in a container
COLOMBO: Customs authorities in Sri Lanka have confiscated four million cigarette sticks at Orugodawatta Container terminal in a container. Market value for the cigarettes was estimated at 112 million in Sri Lankan rupees, a customs official said. The cigarettes were imported from Dubai under disguise, Customs spokesperson Leslie Gamini said. The cigarettes had been imported as curtains to a fake address in the city and it is the largest ever detection of cigarettes by the customs, he said.
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70 acres of KPT land retrieved: Michael
ederal Minister for Ports and Shipping Kamran Michael said that 70 acres of land has been retrieved from the mafia. He also directed the Chairman Karachi Port Trust (KPT) to continue the operation against encroachments. The Federal Minister reached Karachi to monitor the antiencroachment operation. In the first phase, 200 unlawful houses on Karachi Port land were demolished on the direction of the Minister. The retrieved land is handed over to the KPT administration, he added. —CT Report
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AnFcaptures150kg hashish,14kgopium he Anti-Narcotics Force (ANF), Karachi Region recovered 150-kg of hashish and 14-kg of opium in a search operation near Hub Chowki at Northern Bypass and arrested two drug peddlers. According to details, the accused identified as Rasool Bakhsh and Muhammad Qasim were attempting to transport the drugs in a jeep (BC-7374) from Noshki, Balochistan to Hyderabad. On a tip-off, an ANF team intercepted the jeep near Northern Bypass and recovered 150 kg of hashish and 14 kg of opium from hidden compartments of the vehicle. The ANF arrested the accused and impounded the jeep. —CT Report
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PCG confiscates 675 kg hashish patrolling team of Pakistan Coast guards (PCG) has confiscated a large quantity of hashish hidden in a truck in Lasbela district while snap checking of vehicles on a secret information. The truck was on its way to Karachi from Quetta while it stopped at Winder checkpost. PCG’s mobile team searched the vehicle and found 675 kilograms of hashish hidden in the coals. The team was checking out vehicles at the Naka Khari check post on the RCD Highway when a truck carrying coal pulled up at a short distance away. The truck driver and another man fled the scene, leaving their vehicle behind. —CT Report
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normalized reciprocal trade with India to triple pakistani exports
Paper units faced the music for fake refunds claims
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Opening up of Pakistan’s market through Attari-Wagah border is linked to Indian grant of non-discriminatory market access on 250 export items ISLAMABAD
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ederal Minister for Commerce Khurram Dastgir Khan has said that normalising of trade relations with India could boost up Pakistan’s exports to India up to three times in a short term as existing Pakistani exports to India were in the range of $500$600 million annually. He said that opening up of Pakistan’s market through Attari-Wagah border is linked to Indian grant of non-discriminatory market access on 250 export items from Pakistan and abolishing of sensitive list under the South Asian Free Trade Agreement (SAFTA) in a more accelerated manner. The minister said that Punjab Chief Minister Shahbaz Sharif extended an invitation to India’s commerce minister for visiting Pakistan on February 14 to inaugurate the Indian exhibition. “On the sidelines, both the sides could discuss a timeframe for enhancing the bilateral trade,” he said and adding that cooperation in the telecom sector and permitting TV channels in each other’s countries could be discussed in the next round of talks. Pakistan would increase scanners at the Wagah border to facilitate the bilateral trade between the two
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countries, he maintained. He said that he had told his Indian counterpart that India will have to remove two major Non-Tariff Barriers, the Pirst one being granting of visas to our business community just as Pakistani side is fully facilitating the Indian businessmen. The second important conPidence-building measure, he said, was that both countries should not allow any unwarranted incident to derail the peace and trade normalisation process. “India will have to demolish this wall of no visas to our businessmen,” the minister commented. The minister said that there could
BR blacklisted sales tax registration of around 25 units in paper/packaging industry for obtaining refunds on fake invoices. These companies, registered with the Regional Tax Office (RTO) Karachi, had claimed around Rs870 million during the tax year 2012-13. However, the post-refund audit detected discrepancies in their transactions which also exposed the inefficiency of the officials concerned in issuing such huge amounts without proper scrutiny. Commenting on the issue, a tax official said that the real problem was within the output stage where the manufacturers purchase raw material (scrap paper) from mostly unregistered sector, adding that to reduce their sales tax liability, they declare less volume which was estimated to be 20 percent. He claimed that around 80 percent of the manufactured paper was concealed as they remain unable to get input adjustment from their unregistered sellers. The official said that various fake companies who managed to get sales tax registrations, obtain refund claims on the basis of transactions. In the past, tax offices had demanded to invoke Section 40B of the Sales Tax Act, 1990 but were denied by the FBR authorities. The Section 40B of the act describes about the posting of an Inland Revenue Officer and said:“Subject to such conditions and restrictions, as deemed fit to impose, the board, may post an officer of the Inland Revenue to the premises of registered person or class of such persons to monitor production, sale of taxable goods and the stock position provided that if a commissioner, on the basis of material evidence, has reason to believe that a registered person is involved in evasion of sales tax or tax fraud. —CT Report
be huge gains in the context of enhancing the bilateral ties but Pakistan would protect certain industries such as automobile, pharmaceuticals, synthetic Pibre and some other sectors. Commenting on the opening up of bank branches in each other’s countries, the minister said that there were no regulatory hindrances involved in this regard and now three banks would approach the Reserve Bank of India to get licences. On establishing joint ventures, he said that such ventures were already established and more such ventures were on the cards.
Exporters await revision of duty drawback rates As there is no major revision in duty structure on the import of materials in 2013-14, the annual revision of duty drawback rates has not been done incorporating the new exchange rates ISLAMABAD
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ederal Board of Revenue is yet to revise the duty drawback rates on the import of certain raw materials/inputs used in the manufacture of export goods. The revision is required under standard duty drawback notiPications after budget 2013-14. Sources said that duty drawback standard SROs are required to be revised in case there is 15 percent increase/decrease in rate of the customs duty on the import of raw materials etc to be used in the export goods. This has been speciPied in the relevant rules dealing with the duty drawback rates. However, there is no major change
There is no major change in customs duty on import of inputs consumed in manufacture of export goods under pcT
in the rates of the customs duty on the import of inputs consumed in the manufacture of export goods under Pakistan Customs Tariff (PCT). Therefore, FBR has not amended the standard duty drawback notiPications during 2013-14. Every year, it is general practice that FBR revises the duty drawback rates in view of the prevailing exchange rate of dollar against the rupee and tariff reductions made in the federal budget. As there is no major revision in duty structure on the import of materials in 2013-14, the annual revision of duty drawback rates has not been done incorporating the new exchange rates. At present, standard duty drawback notiPications i.e. SRO.209, SRO.2010, SRO.2011 and others are dealing with the duty drawback regime. For the calcula-
tion of duty drawback rates, important factors like new rate of customs duty, exchange rate, revised customs tariff, Cost and Freight (C&F) value i.e. import value of inputs goods and Freight on Board (FOB) value of exported goods have to be taken into account. However, the revised calculation of duty drawback rates has been carried out in case when there is a requirement to revise the rates. The payment of duty drawback has been done on the basis of FOB value of the export goods or weight calculated in kilograms, depending on the type of product speciPied in the standard duty drawback notiPications. Thus, there is no need for annual revision of duty drawback rates during current Piscal year following tariff rationalisation in budget 2013-14.
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NATIONAL 03
FEBRuARy 04 - FEBRuARy 10, 2014
KccI welcomes demurrage waiver by pIcT
KARACHI: Pakistan International Container Terminal (PICT) has announced 100 percent waiver on demurrage charges of shipments which remained stuck at the port due to 12-day long strike by goods transporters. Karachi Chamber of Commerce and Industry President Abdullah Zaki has warmly welcomed the decision. Zaki said that this waiver has been announced by PICT after a detailed meeting between PICT Chief Executive retired Capt. Zafar Iqbal Awan and Chairman of KCCI’s Sub-Committee for Ports, Shipping and Multi-Modal Transport, Asif.
Duty waived: FBR allows steel exporter to shift raw material he Federal Board of Revenue has allowed a Lahore-based exporter of iron and steel products to transfer raw materials from a public bonded warehouse to manufacture finished goods to be exported without payment of duties and taxes. The FBR directed Collectors Customs that the issue of transfer of material as per rule 355/356 of the Customs Rules 2001 and problems with WeBOC may be settled as per existing rules and procedure. The board also sought a report in this regard at the earliest. under rule 355 of the Customs Rules, any manufacturer-cum-exporter having an export order or contract in his favour for the supply of goods to a foreign importer may procure duty and taxes free goods from bonded warehouse licensed under Customs Rules, for further manufacture of goods meant for export. As per rule 356 (Bond to bond transfer), the bond to bond transfer of warehoused goods may be allowed by the Collector against an indemnity bond on submission of an application, by the licensee. The transfer, in respect of manufacturing bond, of input goods for getting the same processed in another manufacturing bond or in any other unit located in the Export Processing Zone may be allowed by the Collector. The iron and steel unit submitted a complaint to the FBR, stating that it had applied for transfer of material from public bonded warehouse to manufacturer-cumexporter as per rule 355/356 of the Customs Rules 2001, vide letter dated November 1, 2013 and numbers of subsequent visits to office concerned but to no avail. The complainant said that the offices of WeBOC Director and other officers were visited time and again but the situation remained so. —CT Report
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Dar pins hopes on body for sagacious review of SRos ISLAMABAD
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inance Minister Ishaq Dar reiterated the resolve to review the Statutory Regulatory Orders (SROs) with the aim to make decisions with collective wisdom in national interest. He was chairing the first meeting of the Committee constituted by PM Nawaz Sharif to review concessionary regime (SROs). The Finance Minister pointed out that the PM constituted the committee comprising representatives of the ministries concerned and other stakeholders including business community to protect national interest and rights of industry. He informed that the tax-to-GDP ratio had reduced to 9 percent from 14.5 percent in 1998-99 and the exchequer had to face a loss of over Rs1,400 billion annually. Ishaq Dar said that the Federal Board of Revenue (FBR) had been making strenuous efforts to rationalise and streamline SROs, adding that he had himself held several meetings in this regard so far. “Objective of all these hectic discussions and contemplation is to remove distortions and disparities created due to the issuance of arbitrary SROs,” Dar asserted, adding that the government would provide protection wherever it required and would never impose any burden that affect the common man. He also advised the committee to be careful while deciding fate of SROs as many charitable institutions and nonprofit organisations had been given protection. The Finance Minister expressed his hope that the committee would capitalise on the work already done by the
FBR and come up with concrete recommendations. Federal ministers, Finance Secretary Dr Waqar Masood, Advisor to Finance, the Industries Secretary, FBR Chairman Tariq Bajwa and senior officials of FBR and Ministry of Commerce, representatives of FPCCI, KCCI, LCCI, KPCCI and the Board of Investment Secretary attended the meeting. Meanwhile, Finance Minister Ishaq Dar expressed satisfaction over the current economic condition and progress towards achieving targets set for the current fiscal year, saying the government strategy had yielded satisfactory results. Chairing a meeting held to review state of economy, the minister expressed the hope that external inflows would improve considerably in coming months due to positive impact of GSP Plus. He expressed satisfaction over the fact that credit to private sector had increased to Rs 230 billion during Janu-
ary 2014 as compared to Rs 53 billion in the corresponding period last year. During the meeting, Federal Finance Secretary Dr Waqar Masood briefed the Finance Minister on the measures taken to contain inflation so far. He said that the government steps started showing results as reflected in the continuous decline in Sensitive Price Indicator (SPI) inflation over the past eight weeks including five weeks of December 2013 and three weeks in January 2014. The SPI measures price trend of 53 most essential items. The meeting was informed that essential items such as egg (farm), vegetable gee, onion, tomato, banana, red chilli, rice, basmati broken and wheat flour were showing decreasing trends, whereas there was stability in the prices of bread, beef, chicken farm, fresh milk, cooked dal, gas charges, matchbox, petrol, diesel and bath soap. The meeting also reviewed the balance of payment position.
objective of all these hectic discussions is to remove distortions created due to the issuance of arbitrary SRos
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04 NATIONAL
FEBRuARy 04 - FEBRuARy 10, 2014
german customs seizes banned whale meat
BERLIN: German customs officials have confiscated whale meat being sold as bite-sized snacks by a Norwegian stall at a trade fair celebrating trends in food, agriculture and gardening. The stall's supervisor said that he was surprised to hear the sale of whale meat was "meant to be illegal here". He claimed his team had been able to take the food through customs without problem. "We wanted to showcase Norway's variety,” he added. Whale meat is illegal in Germany and majority of the EU countries.
FBR takes a sagacious step
no ban on gold jewellery export, FBR tells Mccs he Federal Board of Revenue categorically declared to Model Customs Collectorates (MCCs) that there was no restriction on export of gold jewellery and exporters should fulfill export obligations required under SRO 760(I)/2003. The board elaborated that the import and export of gold, gold jewellery and gemstones be regulated as par the instructions of the Commerce Ministry. It is to be mentioned that the Cabinet’s Economic Coordination Committee (ECC) decided banning imports of gold under SRO 760(I)/2013 for a period of 30 days in its meeting on January 20. The ECC also decided that import under Sr. No 16 of PartII of Annex-B of Import Policy Order, 2013 will be suspended for the same period. The ECC directed the FBR to instruct the collectorates to implement the decision. It also asked the Trade Development Authority of Pakistan (TDAP) not to issue any import authorisation during the period. However, it declared that there was no restriction on export of gold jewellery and advised the TDAP to strictly monitor export obligations and ensure that all exporters must fulfill their export obligations under Sr. No 11 of the SRO 760(I)/2003. The ECC took the decision on the request of Foreign Exchange Companies that gold smuggling and its subsequent pressure on open forex market had resulted in rupee depreciation in meetings with the Finance Minister in Karachi and a follow-up meeting. —CT Report
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Chinesebuyersorder trialimportofriceworth $4mfromPakistan ice exporters from Pakistan have obtained orders worth $ 4 million from China during a recent visit. Shipment of these orders will start from second week of next month. Rice Exporters Association of Pakistan (REAP) seniorVice Chairman Chela Ram said that the visit of 25-member delegation to China for further exploration of rice market was successful initially, as exporters have got orders about 10,000 tonnes of rice.“We had very interactive meetings with Chinese authorities and leading rice buyers. Chinese consumers take keen interest in Pakistani rice especially‘long grain’because of its high quality,” he said. After fulfilling the trial orders, we are hopeful to get export orders of huge quantity of Pakistani rice in future and trade between both the friendly countries will increase in a significant ratio. He said that China has emerged as a new rice market for Pakistani traders and it is expected that after the recent visit Pakistan’s rice exports to China will gradually increase in upcoming years. He said,“Pakistan's rice exports to China stood at 500,000 metric tonnes during Fy-13. He requested the government to send REAP delegations to China on regular basis at least twice in every financial year, to maintain and increase the market share of Pakistani rice. —CT Report
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PMSA,PCGempoweredtotakeonsmugglers pakistan coast guards shall exercise due care and ensure that these functions are not used to the detriment of trade, imports and exports and to harass the general public ISLAMABAD
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ith the aim to curb the crossborder smuggling, the Federal Board of Revenue (FBR) delegated the powers to Pakistan Maritime Security Agency (PMSA) and Pakistan Coast Guards (PCG) to searching and arresting smugglers and stop and search sea transport with the authority to conPiscate smuggled goods till June 30, 2014. According to SRO 42 (l)/2014 issued in this regard, the FBR has delegated the powers of Customs ofPicers under sections 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, sub-sections (1), (3) and (4) of section 168, sections 169 and 171 of the Customs Act to all ofPicers of the Pakistan Coast Guard, not below the rank of Junior Commissioned OfPicer, subject to the laid down conditions. The purview of the powers will be limited within 20-km of coastline and exclude the city municipal limits, Customs areas, Customs stations, ports, Borders Customs stations, International Airports and Bonded Warehouses, etc; they shall not check any bona Pide passenger's baggage and goods cleared from any Customs area. Pakistan Coast Guards shall exercise due care and ensure that these functions are not used to the detriment of trade, imports and exports and to harass the general public; and the seized goods shall be dealt with under the relevant provisions of the Customs Act, 1969. Through another SRO 43(l)12014, the
board has delegated powers of Customs ofPicers under sections 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, subsections (1), (3) and (4) of section 168 and sections 169 and 171 of the Customs Act to all ofPicers of the Pakistan Maritime Security Agency not below the rank of Fleet Petty OfPicer. The section 158 under the Customs Act is related to the power to search on reasonable ground, section 159 (persons to be searched may desire to be taken before gazetted ofPicer of customs or magistrate) and section 160 is related to the power to screen or X-Ray bodies of suspected persons for detecting secreted goods. The section 161 is related to the power to arrest, section 162 (power to issue search warrant), section 163 is related to the power to search and arrest without warrant and section 164 deals with the power to stop and search conveyances. The section 165 grants power to examine persons, section 166 deals with the power to summon persons to give evidence and produce documents or things, section 167 is related to the person escaping may be afterwards arrested, section 168 deals with the seizure of things liable to conPiscation, section 169 is related to the things seized, how to deal with section 171 of the Customs Act is related to the when seizure or arrest is made, reason in writing to be given. Following is the text of the notiPication: SRO 42(l)/2014.- In exercise of the powers conferred by subsection (1) of section 6 of the Customs Act, 1969 (IV of the 1969), the Federal Board of Revenue is pleased to entrust functions of ofPicers of Customs under sections 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167,
The section 165 grants power to examine persons, section 166 deals with the power to summon persons
sub-sections (1), (3) and (4) of section 168, sections 169 and 171 of the said Act to all ofPicers of the Pakistan Coast Guard not below the rank of Junior Commissioned OfPicer within their respective jurisdiction, subject to the following conditions, namely: (a) The functions shall be limited within twenty kilometers of coast line; the functions shall exclude the city municipal limits, Customs areas, Customs stations, ports, Borders Customs stations, International Airports and Bonded Warehouses, etc; they shall not check any bona Pide passenger's baggage and goods cleared from any Customs area; they shall exercise due care and ensure that these functions are not used to the detriment of trade, imports and exports and to harass the general public; and the seized goods shall be dealt with under the relevant provisions of the Customs Act, 1969 (IV of 1969). This notiPication shall remain in force till June 30, 2014. The following is the text of the notiPication issued: SRO 42(l)/2014: SR.O.43(l)12014.- In exercise of the powers conferred by sub~ section (1) of section 6 of the Customs Act, 1969 (IV of the 1969), the Federal Board of Revenue is pleased to entrust functions of ofPicers of Customs under sections 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, sub-sections (1), (3) and (4) of section 168 and sections 169 and 171 of the said Act to all ofPicers of the Pakistan Maritime Security Agency not below the rank of Fleet Petty OfPicer within their respective jurisdiction. This notiPication shall remain in force till June 30, 2014.
Hundreds of vehicles stuck up at Karachi ports given waiver ISLAMABAD
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he Economic Coordination Committee (ECC) of the Cabinet decided to grant onetime waiver for clearance of used vehicles by importers of cars manufactured in the year 2009. The executive body also allowed the Trading Corporation of Pakistan (TCP) to purchase 75,000 tonnes of sugar from mills in the first month and 50,000 tonnes in the subsequent months. The ECC which met under the chair of Finance Minister Ishaq Dar took up a number of issues for consideration and approval. The meeting was attended by Minister for Planning and Development Ahsan Iqbal, Minister for Industries and Production Ghulam Murtaza Jatoi, Minister for National Food Security Sikandar Hayat Bosan, Minister for Infor-
mation and Broadcasting Pervaiz Rashid, Minister for Science and Technology Zahid Hamid, Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi, Minister of State for Information Technology Anusha Rehman Khan, Chairman Privatisation Commission Muhammad Zubair, Statistics Division Secretary Rukhsana Saleem, Textile and Industries Secretary Rukhsana Shah, Petroleum and Natural Resources Secretary Abid Saeed, Finance Secretary Dr Waqar Masood Khan, Advisor to Finance Ministry Rana Asad Amin, Secretary Industries and Production Shafqat Hussain Naghmi, Secretary Planning Hasan Nawaz Tarrar, Revenue Division Secretary Tariq Bajwa, Water and Power Secretary Saifullah Chattha, Securities and Exchange Commission Chairman Tahir Mehmood, SBP Deputy Governor Ashraf Mehmood Wathra, Additional Sec-
retary National Food Security Iftikhar Ahmed Rao, Additional Secretary Communication Aurangzeb Haq, Additional Secretary Commerce Fazal Abbas Maken, Additional Secretary Economic Affairs Yasmin Masood and senior government officials. According to the meeting proceedings, the Ministry of Industries was not in favour of the Commerce Ministry's summary for the clearance of used vehicles of 2009 model. The Secretary Industries tried to voice his concerns over the summary but reportedly he was not allowed to speak by the Finance Minister. It may be recalled that it came to the notice of the Finance Minister during a presentation made by FBR recently that hundreds of cars were stuck up at the Karachi Port for which a representation had also been made to him during his recent visit to Karachi as well.
The Ministry of Commerce informed the ECC that around 900 vehicles of 2009 model were stuck up on the ports due to confusion in determination of age of cars. The ECC decided to grant a onetime waiver, where the date of Export General Manifest (EGM) was prior to 31.12.2013, subject to payment of surcharge. The ECC approved that the surcharge for the first eight months beyond the prescribed age limit of three years would be calculated on rates stipulated in Ministry of Commerce O.M. Dated 25.2.201 and an additional surcharge for the period (maximum 4 months) beyond 3 years and 8 months at a flat rate of 20 percent of the C&F value. The powers to condone age beyond prescribed age limit, delegated to Collectors Customs, vide Ministry of Commerce OM dated 25.2.2013 and 15.6.2012 were also withdrawn by ECC subject to two months public notice.
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SPECIALREPORT
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he objective of celebrating International Customs Day is to exhibit the preparedness and determination towards eliminating crime and generating revenue while paying tribute to those who laid down lives for securing borders of the motherland. Today all institutions of the federal government, provincial governments and armed forces stand by Pakistan Customs in its Pirm
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determination against all odds in sea, desert and every nook and cranny of the country. This was the crux of speeches made by FBR Member Customs Nisar Muhammad, Chief Collector Enforcement (South) Muhammad Yahya, Collector MCC-Preventive Syed Muhammad Tariq Huda, Additional Collector Headquarters-I Shafqat Ali Khan Niazi, Assistant Collector-HQ I Muhammad Wasif Malik and other Customs ofPicers at a ceremony held to celebrate International Customs Day. FBR Member Customs Nisar Muhammad kicked off the celebrations of International Customs Day by hoisting Plag at Customs House Karachi. Chief Collector Enforcement (South) Muhammad Yahya, Collector MCC-Preventive
Syed Muhammad Tariq Huda, Additional Collector HQ-I Shafqat Ali Khan Niazi, AC-HQ I Muhammad Wasif Malik and other Customs ofPicials were also present on the occasion. Later on, a simple but impressive ceremony was held at Naval area of ‘Ghaggar Phattak’ on National Highway. Chief Collector Enforcement (South) Muhammad Yahya was the chief guest at the ceremony while heads of other agencies including Director General Anti-Narcotics Force (ANF) Brig Muhammad Abuzar and Deputy Director General Maritime Security Agency Rehan Khan attended the ceremony. Speaking on the occasion, Chief Collector Yahya said that objective behind celebrating the International Customs Day was to show
the international community and the nation that Pakistan Customs was committed to ensuring security of the country’s revenue borders. On the occasion, ANF Sindh DG Brig Muhammad Abuzar termed the role of Pakistan Customs very responsive towards curbing narcotics smuggling. “I have been in close coordination with Pakistan Customs after coming into Karachi and the determination and dedication showed by its ofPicial impressed me”, he added. Collector Model Customs Collectorate (MCC) Preventive Syed Muhammad Tariq Huda in his welcome address said that the Pakistan Customs celebrated the International Customs Day as a religious festival.
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SPECIALREPORT 07
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objective behind celebrating the International customs Day was to show the international community and the nation that pakistan customs was committed to ensuring security of the country’s revenue borders. 4 3
All institutions of the country including media, judiciary, armed forces and others acknowledged the significant role of pakistan customs as leading agency in safeguarding the economic fronts
— Exclusive Customs Today photos
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Member customs nisar Muhammad in a group photo with chief collector enforcement (South) Muhammad Yahya, chief collector enforcement Appraisement nasir Masroor Ahmed, Director I&I Dr Manzoor Hussain Memon and other customs officers Member customs nisar Muhammad hoisting flag on International customs Day chief collector enforcement (South) Muhammad Yahya giving away souvenir to AnF Sindh Dg Brig Muhammad Abuzar collector preventive Syed Muhammad Tariq Huda addressing on Int’l customs Day
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08 EDITORIAL
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Founder & Chairman Zulfiqar Ali Editor Rahil Yasin editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk +92-322-3370002 www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore
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used vehicles clearance
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he Economic Coordination Committee (ECC) of the Cabinet in its last meeting, held under chairmanship of Finance Minister Ishaq Dar, approved granting waiver of four months on the prescribed age limited of 900 vehicles which were stuck at Karachi Port because of confusion. Out of 900 stuck vehicles lying at the port, majority of them were small and medium vehicles and apparently it seemed that the government rightly granted one time waiver on their age limit on the basis of the argument that their clearance would yield handsome revenue in shape of duty, taxes and surcharges. In that case if these vehicles were not allowed for clearance theft of spare parts of these vehicles would have been the result. During the ECC meeting, on a summary moved by FBR, the meeting decided to grant one time waiver for clearance of used vehicles by importers of cars manufactured in the year 2009. This issue came to light after the complaints forwarded by affected people to Finance Minister Ishaq Dar and FBR Chairman. It rose to surface during the high-level visit of the economic team to Karachi where Customs authorities also gave briefing to the high-ups. It then came to notice of the Finance Minister Ishaq Dar during a presentation made by FBR recently that hundreds of cars were stuck up at the Karachi Port for which a representation had been made to him during his recent visit to Karachi as well. The Ministry of Commerce informed the ECC that around 900 vehicles of 2009 models were stuck on the port due to confusion in determination of age of cars. In order to permit the clearance of cars, ECC decided to grant a one-time waiver, where the date of Export General Manifest (EGM) is prior to 31.12.2013, subject to payment of surcharge. ECC approved the surcharge for the first 8 months beyond the prescribed age limit of 3 years shall be calculated on rates stipulated in Ministry of Commerce O.M. Dated 25.2.2013 and an additional surcharge for the period (maximum 4 months) beyond 3 years and 8 months at a flat rate of 20% of the C&F value. The powers to condone age beyond prescribed age limit, delegated to Collectors of Customs, vide Ministry of Commerce OM dated 25.2.2013 and 15.6.2012 was also withdrawn by ECC subject to two months public notice. ECC permitted the relevant Customs Collectorate may continue to be delegated the authority for condoning delay in shipment by 30 days beyond the prescribed 120 days (para 4(1)(b) and 4(3)(c) of the Appendix-E of IPO-2013, against an additional surcharge of 5%.
IMF likely to resist amnesty schemes in review talks ISLAMABAD
SM HAIDeR
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W
ith increased slippages on account of achieving the desired tax collection target for the current fiscal year, the country’s overall fiscal framework and amnesty scheme unveiled by PML (N) regime will become hot topics between Pakistani authorities and the IMF in review talks in Dubai. Although, Pakistani authorities are confident about smooth completion of second review which will pave the way for release of third tranche worth $545 million under $6.67 billion Extended Fund Facility (EFF) in March. In the upcoming review talks, the FBR’s shortfall of Rs 80 billion at least will become headache for the economic managers during Dubai parleys with the IMF team led by Jeffery Franks who will especially raise the distortion created by this government through tax
amnesty scheme and granting immunity from audit. The IMF considers tax amnesty scheme and waiving audit as severe distortions created in taxation system of any country. The tax amnesty scheme, in accordance with the analysis of the IMF and World Bank, is actually resulted into unfair treatment with the honest taxpayers. In this context, some kind of heated debate is expected during the upcoming round of review talks between the two sides. At a time of FBR’s revenue shortfall, this government is contemplating upon use of creative accounting techniques to bridge this yawning gap by including all kinds of amount by treating them as non-tax revenues. This practice has helped the government to surpass the non-tax revenue target by collecting Rs 545 billion in first six months against Rs 822 billion envisaged target for the whole financial year. During the upcoming round
At a time of FBR’s revenue shortfall, this government is contemplating upon use of creative accounting techniques to bridge this yawning gap by including all kinds of amount by treating them as non-tax revenues
of talks, the IMF will raise the question about the possibility of achieving the annual tax collection target of Rs 2475 billion for the current fiscal year. Pakistan and the IMF have started review talks in Dubai from February 1, 2014 for completion of second review and release of third tranche. Till January 29, 2014, the FBR collected Rs 1168 billion in first six months and 29 days of this ongoing month. Against the target of Rs 170 billion, the FBR has so far collected Rs 138 billion in January this year. The FBR will have to collect over Rs 1200 billion in the remaining five months (Feb-June) period in order to achieve the desired tax collection target of Rs 2475 billion on June 30. Effective enforcement of withholding taxes, holding tax audits for creating demands and in-depth analysis of each sector and each region can only pave the way for maximizing tax collection efforts and decreasing woes of the economic managers.
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NATIONAL
FEBRuARy 04 - FEBRuARy 10, 2014
09
chambers of commerce & industry suggest reforms in FBR
ISLAMABAD: Chambers of Commerce and Industry from all over the country have asked the government to introduce structural reforms in Federal Board of Revenue so that the tax administration can be business-friendly to revive the economy. This was demanded during a consultative workshop organised by Ministry of Planning, Development and Reforms on "economic revival and growth". One of the representatives said that increase in tax collection is linked to the reforms in tax machinery which must be realised by the government.
Customs Day seminar: Appreciation certificates awarded to customs officers he Pakistan Customs on Monday organized a seminar with the theme of“Communication, Sharing Information for better coordination at the Directorate General ofTraining and Research (DGTR) Building in connection with International Customs Day. Chief Collector Enforcement (South) Muhammadyahya was the chief guest on the occasion, while Chief Collector-Appraisement (South) Nasir Masroor Ahmed, Collector MCC-Preventive Syed MuhammadTariq Huda, Additional Collector MCC-Headquarters I Shafqat Ali Khan Niazi, Additional Collector Air Freight unit (AFu)yaqoob Macau, Director General (DG) ANF Sindh Region, Brig Muhammad Abuzar, heads of Pakistan Coast Guards and Pakistan Maritime Security Agency also attended the ceremony. French Attaché Jean Albertan and Council General France were also present on the occasion. Assistant CollectorHeadquarters I, MuhammadWasif Malik administered the event. Addressing the Customs officers, Chief Collector Enforcement Muhammadyahya said that the Pakistan Customs was working against terrorism and related issues, adding that the nation will hear the“good news”in a matter of days. He advocated that the global community should play its due role in curbing terrorism, adding that the Pakistan Customs through its effective coordination in recent days has produced excellent results. Chief Collector Enforcement reiterated that the“war against terrorism”in and outside the country can only be won by united efforts and as a nation we can prove to the world that we can win the war against terrorism.“Safeguarding the economic and physical fronts of the country is one of the core responsibilities of Pakistan Customs and the presence of other agencies heads on the occasion has proved that the Pakistan Customs has imparted information through an effective strategy”, he added. Chief Collector-Appraisement (South) Nasir Masroor Ahmed has said that the Pakistan Customs with the coordination of other agencies have produced excellent results during last four months. Collector MCC-Preventive S MTariq Huda said that the challenges of Pakistan Customs were growing with every passing day; however, despite all odds, the Customs officials have done marvelous job to curb smuggling activities at various fronts of the city. DG ANF Sindh Brig Muhammad Abuzar said that he felt proud while working with Pakistan Customs, as determined and dedicated officers are present in the service. Brig Abuzar stressed upon the coordinated efforts for curbing smuggling at the entry and exit points of the city. —CT Report
T
wRITe To uS YouR gRIevAnceS: Through cuSToMS ToDAY platform Help DeSK, now you have chance to DIRecTlY write your problems to top govt. functionaries. If you have any grievances, queries, questions or suggestions, you can write in this section as it provides easiest access to you to approach Customs and Revenue authorities. wHo can write in this section? Importers & Exporters, Customs Agents, Chambers of Commerce, Trade Associations and Customs Officers To wHoM you can write? Honourable PM, Minister/Secretary for Finance & Revenue, Minister/Secretary for Ports and Shipping, FBR Chairman, Member Customs and Chairperson Senate/National Assembly Standing Committee on Finance & Revenue. Send your letters at: letters@customstoday.com.pk
Information sharing dominates significant place in customs: virk LAHORE
cuSToMS ToDAY RepoRT www.customstoday.com
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haring of information dominates a signiPicant place in customs and Pakistan Customs has been endeavouring to respond rather to reach out to the trade and industry and all other stakeholders for addressing their issues and taking proper steps. This was stated by central region’s Chief Collector of Customs Lutfullah Virk on the occasion of flag hoisting ceremony on the International Customs Day. Federal Board of Revenue Chairman Tariq Bajwa hoisted the flag to begin the ceremonies. A score of officials at the Model Customs Collectorate Lahore were also present. “We do not want the people to run after us. Rather we like addressing issues of traders and the stakeholders at their doorstep instead of making traditional speeches. Besides, we prefer responding to their answers positively like recently we did in an inactive session of three to four hours with the traders and industrialists at the Lahore Chamber of Commerce and Industry", he added. Shedding light on the technological advancement of Pakistan Customs, the chief collector said, “We take pride in the advancement of technology in our department. Our indigenously developed WeBOC system is much more advanced than the Indian information system. They are still at the level of bill of entry whereas we have progressed to single document Goods Declaration (GD).” He said, “On both fronts, information sharing and information technology, we
are probably one of the most advanced public sector departments.” He also underscored the social engagements of Additional Collector Dar Asif Mehmood Jah who has been running Customs Care Society which is serving the poor section of the society by providing them excellent health care services. This society is also earning good name of the department. On the occasion, collector of customs preventive Junaid Akram said individuals without information sharing cannot perform well. He said, “We are mindful that an individual without information cannot take responsibility but an individual with information cannot help and take responsibility.” “We intend to improve our communication with number of our stakeholders in a variety of ways. First of all we intend to communicate better with the trading community. We also intend to improve communication and feedback system within our own organization so we can serve better. Besides we also intend to
have better communication with international passengers arriving in Pakistan and the overseas Pakistanis,” the collector of customs said. He said that Model Customs Collectorate Lahore is very much aware of the fact that communication with all the stakeholders is the key to success. Collector of Customs Appraisement Zeba Hai Azhar said that presence of a large number of importers, exporters and traders is a proof of the fact that MCC Lahore has an open dialogue with the business community. Faisalabad Collectorate’s collector Zahid Khokhar, Multan’s collector of customs Tauseef Ahmad, Member IR Ashraf Khan, Saeed Akhtar, LCCI president Sohail Lashari, Mian Anjum Nisar, Aftab Vohra, additional collectors, assistant collectors, deputy collectors, superintendents including Iram Sohail, Amara Ahmad, Rizwan Slabat, Yasin Murtza, Kanwal Ali, Sadia Munib, Mohsin RaPiq, Malik Yasin, Akhtar Joya and a large number of customs ofPicials were present on the occasion.
unfair charges by terminals, shipping companies To,
The Minister for Ports & Shipping, Kamran Michael, Islamabad
Respected Sir, I would like to draw your kind attention towards the unfair and unnecessarily rates charged by the terminal operators and shipping companies from the importers in share of terminal handling. The importers are compelled to pay hefty amounts in share of service charges including R&D charges, Weighment/Re-Weighment charges, measurement charges, CFS charges and other unnecessarily charges in addition with demurrage and detention charges.0 While, terminal operators are charging terminal handling charges in addition with demurrage charges. The business community and other stakeholders including importers are facing tremendous problems in paying such unnecessarily charges to terminal operators and shipping
companies, adding that those charges have also increased the cost of imported products. Highlighting the weaknesses of the operations at terminals, I would like to inform you that containers’ grounding issue has not yet resolved at terminals. Delay in examination has become the routine practice at terminals despite the fact that the Examination Request (ER) stats that the containers should be grounded and arranged for examination within 6 hours. Absence of skilled labour and lack of machinery & resources at terminals is also putting an adverse impact on the entire clearing process, adding that there is no secure examination area. Due to this, the consignee is often getting 2-3 items short in their consignments. I hope that you will take these issues into consideration and issue directives for redressal of these prevailing problems faced by importers and business community. Yours’ Truly, Mehboob Ahmed, Karachi
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10 PICTORIAL
FEBRuARy 04 - FEBRuARy 10, 2014
Dutch customs find 1.2 tonnes of heroin concealed in tomato cans
NETHERLANDS: Dutch customs have found 1.2 tonnes of heroin worth € 21.5 million hidden in tins of tomato cans at the German-Dutch border. Officials stopped two trucks from Germany crossing into the Dutch town of Venlo and used a bloodhound to check for drugs. The two drivers, aged 25 and 26 from Turkey, were arrested. The trucks had travelled through Germany but customs declined to reveal their country of origin or the destination of the drugs.
Flag hoisting ceremony on Int’l customs Day FBR chairman Tariq Bajwa in a group photo with customs officers
collector Fazal Yazdani, Director I&I najeebur Rehman Abbasi and Akhtar Ali
— Exclusive Customs Today photos
FBR chairman Tariq Bajwa giving souvenir to chief collector lutfullah virk
collector Tauseef Ahmad Qureshi, collector Samaira nazir, Raja Tahir, Dr Rizwan Salabat, Irfan wahid, M Ismail
FBR chairman Tariq Bajwa giving souvenir to Member IR operation Ashraf Khan
Kanwal Ali, Ammara Durrani
Dg Training and Research Ali Salman Abbassi and Mohsin Asad
Sohail lashari, Zafar Iqbal, Zahid Khokhar, Agha Iftikhar, Amin Haider and Sadia Munib
Anjum nisar and Aftab vohara
Attaur Rehman, Mazhar Abass Butter, Saeed Akhtar Joya, Yasin Malik and ch Aslam
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PICTORIAL 11
FEBRuARy 04 - FEBRuARy 10, 2014
pAMA slams increase in used cars’ import
KARACHI: Pakistan Automotive Manufacturers Association (PAMA) Director General has expressed serious concerns at the rapidly increasing import of used cars. He said that it was alarming that in the first half of FY 2012-13 the figure of imported units was 5,512 and in the second half it had more than doubled to 11,314 units. PAMA DG said there was no apparent justification for this increase, which it described as massive abuse of the facility by traders.
Awards distribution ceremony on Customs Day chief collector enforcement (South) Muhammad Yahya, chief collector, Appraisement (South) nasir Masroor Ahmed and collector Tariq Huda
chief collector enforcement (South) Muhammad Yahya destroying smuggled goods on Int’l customs Day
Member customs nisar Muhammad
Muhammad Yahya giving away the performance award to French Attaché Jean Albertan.
Muhammad Yahya giving away the performance award to Raghib Hasnain, Spo.
Muhammad Yahya giving away the performance award to council general France.
chief collector Appraisement nasir Masroor Ahmed giving away the performance award to Marium Mehndi Ali, AD, Directorate of customs valuation.
chief collector nasir Masroor giving away the performance award to Farrukh Saleem, AD-I, Directorate of Reforms and Automation.
chief collector enforcement giving away the performance award to Muhammad wasif Malik, Ac, Headquarters-I .
— Exclusive Customs Today photos
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FEBRuARy 04 - FEBRuARy 10, 2014
no refund claims on exports to Afghanistan
KARACHI: Federal Board of Revenue has rejected all refund claims generated against export proceeds to Afghanistan by invoking certain provisions of the Export Policy and Procedures Order 2000. Any refund created against sales tax paid on local purchases and subsequent supplies provided to buyers in Afghanistan and via Afghanistan to the Central Asian Republics are not admissible claims. The government had issued guidelines through which exports are not entitled to any duty drawback and zero rating of sales tax on exports to Afghanistan.
— Dr Manzoor Ahmed — ISLAMABAD
FAIZA ISRAR
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F
ormer ambassador to World Customs Organisation (WCO), Dr Manzoor Ahmed said that the theme of World Customs Day is very relevant as globalization demands communication. He said that Pakistan Customs should adopt different ways to improve communication. Pakistan Customs celebrated the International Customs Day at Islamabad Dry Port. OfPicials of Federal Board of Revenue and Model Customs Collectorate Islamabad were also present on the occasion. International Customs Day is celebrated every year on 26th January under the aegis of WCO. Its theme for this year was “Communication: Sharing information for better cooperation.” Dr Manzoor Ahmed argued, “FBR needs to know exactly the indicators useful for trade and for this it has to compile information. An important thing to be taken into notice is that SROs should not be issued frequently. Whatever SROs are issued should be notiPied after complete homework.” He admired the working of customs ofPicials and
emphasized that in addition to smooth and effective working, monitoring is also a compulsory thing. Collector of Islamabad Imtiaz Ahmad Warraich said that communication is the key for better coordination. Pakistan Customs and FBR have to improve communication which will ultimately improve the working of FBR, he added. He said that Pakistan Customs has to cooperate with international customs community for effective information sharing which is the tool for accomplishing the goals and enhancing customs network. It is very much useful in enforcement too. “I am very happy to say that Pak-
istan Customs has implemented WeBOC system to perform customs related functions more effectively and it is indeed playing a vital role in the country’s economy by facilitating trade,” he said.Director Post Clearance and Audit Ameer Mohammad Khan Marwat said that this day shows that all over the world the customs community faces similar issues and problems. He appreciated the fact that Pakistan Customs contributes 34 percent of the total annually collected revenue “which is remarkable.” He also praised the WeBOC system introduced by Pakistan Customs. “It is an indigenous mechanism for automation of system,” he said, adding “we
have to facilitate trade with post clearance control and also stick to the targets set by FBR.” After formal addresses, International Customs Day celebrations proceeded with destruction of 37.92 kg of heroin, 200 foreign origin liquor bottles and other contrabands at Islamabad Dry Port.The best performance award for customs clearing agents was given to New Ehsan Enterprises. Ehsanullah, owner of the leading enterprise, said, “I am grateful to the Collectorate to realize the efforts of customs agents on this special occasion.” As a team we shall work even harder in future, he added.
group photo of customs officials including Former ambassador to world customs organisation (wco), Dr Manzoor Ahmed, Dg post clearance and Audit Ameer Khan Marwat, collector Islamabad Imtiaz Ahmed warraich Published by M. F. Riaz, Off. 91, 3rd Flr, Gul Plaza, M.A. Rd., Karachi, for Customs Today and Printed at Dhoom Printing Press Masheer Mahal Building, Off: I. I. Chundrigar Road, Karachi