Tue feb 18 mon feb 24, 2014 by Customs Today

daily on www.customstoday.com

Find us on

pAkiSTAn’S firST indepTH newSpAper On cuSTOMS

vol 2 issue no. 05

karachi, Tue feb 18 - Mon feb 24, 2014

weekly

regd. no, Mc-1381

Price Rs. 50.00

diSTribuTing expOrT AwArdS

On the occasion of 37th FPCCI export awards distribution ceremony, PM Nawaz Shairf said the industry is being supplied more energy to increase exports | See pAge 04 | revivingecOnOMicgrOwTH LAHORE

M HAYAT

www.customstoday.com

IMF mission is encouraged by the overall progress made in pushing ahead with policies to accelerate economic growth, says Dar | See pAge 03 | incHing TOwArdS ndMA

Both Pakistan and India have agreed to expedite work on granting NDMA status to each other, says Dastgir | See pAge 02 | TApping revenue SecTOrS

Tax authorities should invest energies in the most potential but neglected revenue-generating sectors, says NA Standing Committee on Commerce and Textile Chairman Siraj Khan | See pAge 06 |

ne of the efficient and brightest woman officers of Pakistan Customs, Zeba Hai Azhar, reaffirmed her commitment to achieving overall target set for the financial year 2013-14 with strenuous efforts. Former Collector MCC (Appraisement) Zeba Hai Azhar who is performing her duties as Director DGTR, Lahore, made these remarks during an exclusive interview with Customs Today at Mughalpura Dry Port. It was solely due to Zeba Hai’s proactive approach that the MCC Appraisement witnessed overall 18 percent growth including collection of all taxes during the first half of the current fiscal year as compared to the corresponding period last. “We have recovered Rs250 million in the head of duty and tax remission on export reconciliation which gave impetus to revenue collection despite a huge decline in import volume,” Zeba Hai pointed out and expressed concern over the tangible decline in the import of oil in Lahore, saying that oil import had declined by 40 to 60 percent over the past six months. She claimed that the MCC had

Better management played a vital role in enaBling the collectorate to attain the much-needed revenue growth

been able to increase revenue collection from industrial units, automobiles’ imports and through strong measures against pilferage, adding thatThe MCC Lahore was focusing on recoveries by adopting strict measures like auctioning of the mortgaged properties. “Better management played a vital role in enabling the collectorate to attain the much needed growth,” she explained, saying she was staunch believer in team work. Zeba termed herself to be fortunate enough to have an efficient team. “They constantly remain in touch to discuss revenue target collection and always go for slightest possible revenue through well-thought-out periodical strategies to meet the target,” Zeba revealed while appreciating her officers. She stressed that when subordinates are provided with a level playing field, the results are always certain to be positive. To another question, she termed Member Customs Nisar Muhammad as a man of diverse qualities, saying that he was a well-versed officer having abundant ideas about how to increase revenue.“Nisar Muhammad always guides junior officers about various issues pertaining to Customs by suggesting them various means to overcome problems,” she elaborated. Zeba Hai argued that freight trains would revive Mughalpura Dry Port’s lost status. “At least two freight trains a week should be unloaded at the dry port which will not only expedite import and export activities at the dry port by reducing per unit cost for the industrialists but will also earn huge revenue for the Railways as well,”she concluded.

— Exlusive Customs Today photo

www.customstoday.com

NATIONAL

FEBRUARy 18 - FEBRUARy 24, 2014

bid to smuggle 0.6kg heroin foiled

LAHORE: The Anti-Narcotics Force (ANF) foiled an attempt to smuggle heroin to Kingdom of Saudi Arabia (KSA) and detained a woman. The ANF spokesperson said that baggage of a suspected woman leaving for Jeddah through private airline flight was searched at Allama Iqbal International Airport Lahore. During search 600 gram heroin packed in shampoo bottles was recovered. The ANF seized the drug and took the woman into custody for further interrogation.

Committee formed to review SROs: Mandviwalla

islamabad, delhi inching towards reciprocal ndMA: dastgir ISLAMABAD

cuSTOMS TOdAY repOrT www.customstoday.com

ormer Finance Minister Senator Saleem H. Mandviwalla has said that the Finance Ministry has declared that no customs SROs has been rationalised by the present government with the aim to enhance tax revenue during the current ﬁscal year. However, in pursuance of the announcement made by Finance Minister Ishaq Dar during budget speech, a committee has been constituted to review the concessionary regime and recommend a plan to the government for phasing out unnecessary SROs. Senator Mandviwalla informed that at present there were 65 customs SROs valid and operational.“These SROs have been issued from time to time to give eﬀect to various government policies, decisions and initiatives over a period of three years,”he detailed, adding that the committee had started review of SROs on case to case basis as per formulated principles. —CT Report

Mcc-port Qasim collects over rs20,514m in Jan odel Customs Collectorate of Port Muhammad Bin Qasim has collected a total revenue of Rs 20,514.323 million in share of customs duty, sales tax, income tax and federal excise duty in the month of January 2014 against the set target of Rs 23,646.05 million by Federal Board of Revenue. According to details, MCC-Port Qasim has collected a sum of revenue of Rs 4,579 million in share of customs duty against the set target of Rs 5,484.8 million.The collectorate has collected revenue of Rs 12,921.4 million in share of sales tax in the ﬁrst month of the year against the target of Rs 15,008.2 million. A sum of Rs 226.848 million has been collected in share of FED against the set target of Rs 269.1 million, while it has collected Rs 2,787.1 million in share of income tax in the month of January against the set target of Rs 2,883.9 million. It is pertinent to mention here that the MCC-Port Muhammad Bin Qasim had collected revenue of Rs 4,165.9 million in share of customs duty in the month of January, 2013; Rs 11,941.6 million in share of sales tax; Rs 195.1 million in share of FED; and Rs 2,182.6 million in share of income tax in the month of January, 2013. —CT Report

India. However, both Pakistan and India have agreed to expedite work on granting reciprocal non-discriminatory market access (NDMA) to each other and the Indian trade minister will visit Lahore for the purpose next week. Federal Minister for Commerce Engineer Khurram Dastgir Khan told Senate while responding to identical questions put forward by lawmakers. The federal minister for commerce elaborated that parleys were also underway between the two countries to provide a level playing field for trade and investment. He also informed the Upper House of the Parliament that India had granted MFN status to Pakistan in 1996, however, Pakistan was still considering the issue. Dastgir pointed out that India did not prepare positive or negative lists of tradeable items with Pakistan rather it had sensitive lists which consisted of 1,700 items, adding that talks were underway to reduce the number of items on the lists. The federal commerce minister pointed out that the NDMA did not entail treating imports from a particular country at par with imports from other trading partners in terms of market access and imposition of custom tariff, adding that similarly the MFN was a term used in the

— Exlusive Customs Today photo

akistan has not yet granted non-discriminatory market access (NDMA) and Most Favoured Nation (MFN) status to

Parleys are also underway between the two countries to provide a level playing ﬁeld for trade and investment, says khurram dastgir

WTO agreement. He explained the term (WTO) implied that any advantage, privilege or immunity granted to a WTO member on any product originating in or destined for any other country and has to be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other WTO member countries.

collectors asked to comply with Montreal protocol KARACHI

cuSTOMS TOdAY repOrT www.customstoday.com

ederal Board of Revenue has issued instructions to all Collectors of Customs and Model Customs Collectorate (MCCs) to comply with Montreal Protocal and prevent clearance and release of imported consignments containing HCFCsozone-depleting substances. The instructions have been issued to reiterate Pakistan’s committment to avoid breaching of the international HCFCs phaseout plan from January 1, 2013. The Climate Change Division has apprehended that the import authorisation of HCFC granted to an importer of Rawalpindi would result in serious violations of the international agreement and commitments made by Pakistan under the Montreal Protocol. According to sources, all developed countries are subject to caps on their consumption and production of hydrochloroKluorocarbons (HCFCs), according to the terms of the Montreal Protocol and its amendments. Under the Montreal Protocol, the US and other developed nations must

climate change division has lodged a formal complaint with fbr against import of Hcfcs in excess of allocated quota

achieve a certain percentage of progress towards the total phase-out of production and consumption of HCFCs, by certain dates. The Climate Change Division has lodged a formal complaint with the FBR against import of HCFCs in excess of allocated quota given to a company of Rawalpindi. Ministry of Commerce had issued the authorisation (dated July 19 2012) for the import of the 5000 Metric Tons of HCFC-22 (HS Code 2903-4910) by a company of Rawalpindi located at Railway Workshop Road Rawalpindi. Climate Change Division's had sent a letter to the FBR Chairman Tariq Bajwa on January 22, 2014 on the said subject. The letter read that Pakistan is under obligation to phase out hydrochloroKluorocarbons (HCFCs) as per an agreed incremental phase out plan with effect from January 1, 2013. The base line for the import of HCFCs for Pakistan is 247 ODP tonnes. If such imports are not curbed, Pakistan is likely to breach on its international commitment. FBR shall urgently inquire into the matter and take steps to streamline the anomaly, the letter read. In view of the prevailing situation, the FBR is requested not to allow any import release of HCFCs by the said transport company of Rawalpindi or by any other unauthorised importer, the letter added.

ASF halts attempt to smuggle heroin to UK irport Security Force has arrested a passenger in possession of 1.7 kg heroin at Allama Iqbal International Airport.The passenger was on his way to London via flight from Lahore. The accused was able to pass through three search counters including those of Anti Narcotics Force, Customs and the first counter of ASF.The drugs were detected on second search counter of ASF where staff made a thorough search of his luggage and recovered heroin concealed in his computer. It was second time within week that narcotics were recovered from the fourth search counter. A female passenger was also arrested a few days back carrying heroin in a Shampoo bottle. She also passed through above said three counters successfully. ASF officials after preliminary investigations handed over the accused to ANF authorities for further action. Accused Kashif is resident of Sialkot and he was carrying fine quality heroin of worth Rs 10.75 million in international market. —CT Report

www.customstoday.com

NATIONAL 03

FEBRUARy 18 - FEBRUARy 24, 2014

Over 10pc increase in remittances during current fY

LAHORE: Overseas Pakistani workers remitted an amount of $ 9,033.41 million in the first seven months (JulyJanuary) of the current fiscal year, showing a growth in remittances of 10.08 per cent against $ 8,206.34 million received during the same period of last fiscal year. In January 2014, the inflow of remittances from Saudi Arabia, UAE, USA, UK, GCC countries, and EU countries amounted to $ 393.12 million, $ 213.50 million, $ 193.01 million, $ 169.46 million, $ 150.31 million and $ 34.56 million respectively.

customsatwagah: delayinclearance drawsconcern ISLAMABAD

Elimination of tax exemptions critical to future of Pakistan economy: IMF

cuSTOMS TOdAY repOrT www.customstoday.com

WASHINGTON/DUBAI

cuSTOMS TOdAY repOrT

he Punjab government has expressed serious concern over delay in the clearance of perishable items, especially vegetables from India at Wagah Border by the customs authorities. According to details, the Punjab Agriculture Department has written a letter to FBR Chairman Tariq Bajwa, citing inordinate delay in the clearance of perishable item which has been causing loss to the national exchequer and importers as well. The FBR has already issued instructions to the customs authorities in Lahore to ensure speedy clearance of imported consignments, i.e. perishable items from India to avoid losses to importers. But the customs authorities failed to take necessary measures to ensure timely clearance of perishable items from India. It is to be noted that the issue came to surface in a meeting of the Punjab Cabinet Committee when representatives of the importers of vegetables complained regarding delay in the clearance of perishable items, especially vegetables at Wagah Border. Taking up the issue, the Punjab Agriculture Department has written to the FBR chairman, seeking directions to be issued to the Customs Clearance oﬃcers concerned at Wagah Border to ensure clearance of perishable items before 2:00pm on daily basis. The department was of the view that in the past, the customs authorities used to clear perishable items on priority basis.

www.customstoday.com

he International Monetary Fund anticipated that Pakistan’s economy is demonstrating signiKicant improvement with growth rate likely to be higher than previous estimates. In a statement issued in Washington after at the conclusion of talks between the IMF staff and a top-level Pakistani delegation, the Fund also acknowledged Pakistan’s progress with reforms. Pakistan’s Finance Minister Ishaq Dar, State Bank of Pakistan (SBP) acting Governor Ashraf Wathra, Finance Secretary Dr Waqar Masood and other senior ofKicials met the IMF team led by Jeffrey Ranks, in Dubai and held productive discussions, it said. "The IMF mission is encouraged by the overall progress made in pushing ahead with policies to strengthen macroeconomic stability and reviving economic growth," Jeffrey Franks told a joint news conference with Pakistan's Kinance minister after their consultations. The IMF's executive board is tentatively scheduled to consider in late March whether Pakistan will obtain the third tranche of its IMF loan programme, Franks said. He said the IMF was not imposing privatisation on Pakistan but was very supportive of the process. "The authorities' reform programme remains broadly on track with the government meeting all of the quantitative performance criteria by end-December 2013," Franks said. Franks said decisive efforts to broaden the tax net through elimination of tax exemptions and loopholes granted through statutory regulatory orders are critical to the future of Pakistan's economy, the IMF also said. Dar described the country's eco-

nomic growth as ‘encouraging’, adding tax collection had risen 26 percent in January and that the IMF seemed to be more or less satisKied with the central bank's net asset reserves. The IMF and Pakistan differ on inKlation expectations, with the Fund projecting a 10 percent rate in the current Kiscal year. The Washington-based body encouraged Pakistan's central bank to be vigilant in coming months to guard against a rebound of inKlation. It would like to see price growth in a 6-7 percent range on a sustainable basis, Franks said. Dar admitted the government expects inKlation to rise above its current 7.9 percent but that it will not hit double digits. "Based on the moderate rate of inKlation of 7.9 percent during January 2014, we expect that inKlation for the entire Kiscal year would remain within a single digit." The deKicit, which was roughly 9 percent of gross domestic product in 2012, needs to be brought down to around 3.5 to 4 percent by the end of the three-year program. Dar said the deKicit for the Kirst half

pakistan’s economy is showing signs of improved economic activity, says ishaq dar

of the Kiscal year stands at 2.2 percent. Pakistan is "well on track" in the process of issuing a eurobond, and expects the process to be completed by the end of March, the minister said. He said he did not expect the cost of the issue to be over 6 percent, and that it should be around the "usual" benchmark price. "There is a huge demand for this bond and it may be followed by an Islamic bond or sukuk. I'm not sure because it depends on the interest - but so far we are very positive." Dar said the government is following "very strict austerity measures" that have not been easy to make. "I think we have taken very painful measures, which were partially politically unpopular, but I think they were needed by the country and it has not only changed the direction of the economy. It has put us on the road of recovery and stability," he said. About the pipeline project between Iran and Pakistan, Dar said IP gas project was still on hold due to Kinancial constraints on the Iranian side.

www.customstoday.com

04 NATIONAL

FEBRUARy 18 - FEBRUARy 24, 2014

Smuggler arrested with 18 kg hashish

HUB: Crimes Investigation Agency wing of Hub police has recovered 18 kilogram hashish and arrested a smuggler. Police officials said that the police on secret information launched operation in the suburbs of Hub. During crackdown 18 kg of high quality hashish was recovered from a drug peddler. In the preliminary interrogation it was revealed that he was going to smuggle the drugs to Karachi. The police seized the recovered drugs and registering a case against the accused started the investigation.

37th fpcci export Awards distribution ceremony

Directorate gears up for connecting NTC withWeBOC he Directorate of Reforms and Automation has geared up for linking National Tariff Commission (NTC) with WeBOC, computerised system of Pakistan Customs. The sources informed CustomsToday that the Directorate of Reforms and Automation has finally decided to connect NTC with WeBOC, computerised system, in a meeting chaired by Project Director,Tanvir Ahmad at his office onWednesday. They further said that the NTC access into WeBOC would also play a vital role in curbing revenue leakages, by conducting proper monitoring throughWeBOC system. “The basic working of NTC is to impose anti-dumping duty on industrial products and its linking with WeBOC would put a positive impact on revenue collection”, they added. The sources told this scribe that the implementation on connecting the NTC with WeBOC will take couple of months and the Directorate will complete its entire working on it soon. It is pertinent to mention here that the NTC has written to Federal Board of Revenue (FBR) in order to collect antidumping duty and it takes 7 to 8 days for implementation, which perturbs the revenue collection. —CT Report

fbrhavetorace againsttimetomeet rs2,475btarget n view of the ambitious revenue target and the remaining months of the current fiscal year (February-June), the Federal Board of Revenue will have to strive hard to sustain 26 percent growth in revenue collection to meet the target of Rs2,475 billion. The FBR has recorded a 26 percent growth in revenue collection by collecting over Rs168 billion in January 2014 as compared to Rs132 billion in January 2013.The monthly collection in January 2013 showed an increase of 15.5 percent against January 2012.The provisional growth has given confidence to the tax authorities to further improve revenue collection in the remaining period of 2013-14. The 26 percent growth in January is being attributed to increase in sales tax rate from 16 to 17 percent and rise in the price of petroleum products. Similarly sales tax collection stood at Rs564.68 billion in JulyJanuary 2013-14 as compared to Rs464.155 billion in the same period last year, showing a growth of 21.65 percent. Another factor behind the rise in revenue collection has been effective monitoring of withholding taxes, checking revenue leakage of sales tax and impact of the budgetary measures. As per major budgetary measures, exemption of the federal excise duty on certain items was withdrawn in budget (2013-14) with enhancement in the rate of sales tax from 16 to 17 percent and imposition of one percent further tax. The expansion of the scope of withholding taxes and effective monitoring and enforcement strategy contributed to increase in revenue collection . —CT Report

industry being supplied more energy to boost exports: pM LAHORE

cuSTOMS TOdAY repOrT www.customstoday.com

rime Minister Muhammad Nawaz Sharif has said that Industry is being supplied more electricity and gas as compared to previous years in order to boost up export volume and generate employment. He said this while addressing the 37th Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Export Awards distribution ceremony here. “We will not only jack up the export volume but also create employment opportunities. The electricity supply to the industry, especially the power looms in Faisalabad, had ended unrest within the industrial sector,” he said. The Prime Minister said that Pakistan could get optimal beneKit from the GSP-Plus (Generalized System of Preferences) status by keeping the industrial wheel on the move, as a vibrant industry would increase resources, which would help ensure Pakistan's development and nation's prosperity. “The country's GDP growth was scaling up and revenue collection has improved substantially. The government has devised an effective policy for maximum supply of electricity and gas to the industry,” the PM said. He added that industry was supplied more electricity and natural

gas this year against the previous year. “Economic indicators were now improving that would ultimately ensure progress of the country and prosperity of the people. Nationalisation of industries was a major factor behind unemployment in Pakistan,” he said, explaining that it was not the job of the government to run businesses. He said banks which had been

Pakistan can get optimal beneﬁt from GSP-Plus status by keeping industrial wheel on the move, says pM nawaz Sharif

privatised were paying billions in taxes while public sector banks which were previously in deKicit were now turning out proKits. The prime minister attributed the power crisis in the country to policies implemented during the past. “I believe in more implementation and less promises. 10,000 MW power shortages could not be resolved in one day,” he concluded.

Newtaxationmeasures:FBRtoseekstakeholdersinput ISLAMABAD

cuSTOMS TOdAY repOrT www.customstoday.com

he Federal Board of Revenue is likely to seek stakeholders input on a major policy shift in the new taxation measures for the next budget (2014-15) by sharing key features of Finance Bill including legal/procedural changes in federal tax laws during MarchApril 2014. As per details, the Federal Board of Revenue (FBR) wants the major policy shift during Kinalisation of new taxation measures for 201415 and will discuss the idea with the Finance Ministry for necessary approval. The FBR is likely to propose to the Finance Ministry sharing key taxation measures in sales tax, income tax and federal excise duty with the business and trade before budget announcement.

The exercise will enable the board to have input on major taxation measures and legal/procedural changes in federal tax laws two months prior to passage of the Finance Bill by the Parliament. It will also provide the FBR with time to review reaction of the busin e s s community on measures to be announced in budget. By sharing key features of major changes in tax laws, the tax authorities will be enable to take into account

technical and legal input of stakeholders and re-draft their budget proposals. The FBR has also given a broader guideline on the exemption notiKications to the Prime Minister's committee reviewing the SROs. The FBR has also asked the stakeholders to give their input on certain SROs. The business community would give their input on customs SROs including SRO 567, SRO 565, SRO 575, SRO 678, SRO 655, SRO 656, SRO 809 and SRO 693. Sales tax SROs including SRO 727, SRO.1125, SRO.549, SRO.575, SRO 551, SRO.69, SRO 501 and SRO 670 and all SROs of income tax.

www.customstoday.com

NATIONAL 05

FEBRUARy 18 - FEBRUARy 24, 2014

Smuggler with 1kg heroin busted

ISLAMABAD: Airport Security Force has arrested a passenger who was trying to smuggle about one kg of heroin to Saudi Arabia. According to details, the passenger namely Abdul Majeed belonged to Sargodha and was travelling to Jeddah from Benazir International Airport. One of the ASF officials started searching his luggage on doubt and recovered the illicit drugs from secret pockets of his bag. The contraband was confiscated and the passenger was in custody for further investigations.

Valuationrulingof minivans,minitrucks, pick-upsissued he Directorate General of Customs Valuation has determined the Customs values of mini vans, vans, mini buses, mini trucks, pick-ups of China origin through aValuation Ruling No.637/2014 under section 25-A of the Customs Act, 1969. Customs values of mini vans (CBU) of a cylinder capacity not exceeding 800cc having the PCT Code 8703.2113 and proposed PCT forWeBOC is 8703.2113.1000 has fixed at US$3500. The Customs values of Mini vans (CBU) of a cylinder capacity not exceeding 800cc, but not exceeding 1000cc having the PCT Code 8703.2195 and proposed PCT for WeBOC is 8703.2195.1000 has fixed at US$3800.The Customs values of Mini vans (CBU) of a cylinder capacity exceeding 1000cc, but not exceeding 1300cc having the PCT Code 8703.2240 and proposed PCT forWeBOC is 8703.2240.1000 has fixed at US$4000. The Customs values of Mini truck, pick-up with g.v.w not exceeding 5tons up to 1000cc having the PCT Code 8704.2190 and 8704.3190.1000 and proposed PCT forWeBOC is 8704.2190.1000 and 8704.3190.1000 has fixed at US$3800. The Customs values of Mini trucks, pickups with g.v.w not exceeding 5tons (1000 to 1300cc) having the PCT Code 8704.3190 and proposed PCT forWeBOC is 8704.3190.1100 has fixed at US$4400. The Customs values of vans (10 to 11 seater) having the PCT Code 8702.9090 and proposed PCT forWeBOC is 8702.9090.1000 has fixed at US$8000 (with air conditioner).The Customs values of Mini buses (12to15 seater) having the PCT Code 8702.9090 and proposed PCT for WeBOC is 8702.9090.1100 has fixed at US$12700. —CT Report

Mcc-Appraisement (west) collects rs14897.82m revenue in January Revenue collection has been increased by 31.5pc in Jan 2014 KARACHI

SOHAiL rAb kHAn www.customstoday.com

he Model Customs Collectorate (MCC) AppraisementWest collected total revenue of Rs14897.82 million in different shares including Customs Duty (CD), Sales Tax (ST), Withholding Tax (WHT) and Federal Excise Duty (FED) in the month of January 2014. According to the details, the MCC-Appraisement (West) has collected Rs 5532.42 million in share of Customs Duty, Rs 6456.38 million in share of Sales Tax, Rs 2796.26 million in share of Withholding Tax and Rs 112.76 million in Federal Excise Duty (FED). When contacted, the senior ofKicer of MCC-Appraisement (West) told Customs Today that the revenue collection was increased by 31.5pc as compared to the same period of the last year (January2013). He further said the achievement of revenue collection target depends on imports and unfortunately importers recorded a 4 percent decrease in the imports as compared to the corresponding period of the last Kiscal year.

DirectorateofReforms&Automationholdstrainingsessionforstudents KARACHI

cuSTOMS TOdAY repOrT www.customstoday.com

irectorate of Reforms and Automation of Pakistan Customs has organised a training session for the students of Bahria University, MBA Executive Programme at Customs House, Karachi. Addressing the participants, Project Director Reforms and Automation, SyedTanvir Ahmad emphasized that theWeBOC training shall be made a part of the curriculum of MBA degree programme. On the occasion, Project Director Reforms and Automation Tanvir Ahmad offered services to the management of Bahria University for arranging hands on training regarding the Electronic Data Interchange (EDI) messaging system, carrier declaration, goods declaration filing and Import General Manifest (IGM) filing for the students by theWeBOC team. He further asserted that other countries have now introduced a concept of‘one-window’for automated customs clearance of the goods, adding that the Federal Board of Revenue was also mulling over to formulate effective single window operations in Pakistan Customs. — Exlusive Customs Today photo Additional Director, Directorate of Reforms and

Automation, Farrukh Sajjad in his welcome address said that Pakistan Customs was doing its best to evolve an international level paperless system for the importers and other stakeholders in filing their GDs. Sajjad said that the upgradation of theWeBOC computerized system is at its final stage and soon the stakeholders will experience a contemporary paperless system for filing their GDs. On the occasion, Deputy Director, Alizeb Khan gave a presentation about the operational introduction ofWeBOC, rollout ofWeBOC and functions of the Directorate of Reforms and Automation to the students of Bahria University. In his presentation, Alizeb highlighted the basic features of automated Customs Business processes. He also emphasized that theWeBOC, is homegrown and self-contained software, which not only ensured the client facilitation, but also enhanced the competitiveness of expeditious release of cargo. The Deputy Director also explained the participants that how all the stakeholders are integrated withWeBOC on real time basis and briefed them about the existing modules of WeBOC. On the occasion, the participants were fully sensitized with the paperless, online system of customs clearance based on an effective Risk Management System (RMS).Technical staff ofWeBOC also gave training to the students for preparation of a GD filing inWeBOC.

— Exlusive Customs Today photo

SPECIALREPORT

www.customstoday.com FEBRUARy 18 - FEBRUARy 24, 2014

www.customstoday.com

SPECIALREPORT 07

FEBRUARy 18 - FEBRUARy 24, 2014

ational Assembly Standing committee on commerce and Textile chairman said i do not belong to khurram dastgir’s party, i admit the commerce Minister is performing well and leading the ministry in the right direction. i am hopeful things will go better with the passage of time

ISLAMABAD

fAiZA iSrAr

www.customstoday.com

uccessive governments overcrowded and overburdened the Commerce and Textile Ministry through hiring of their ‘favourites’ without taking its capacity and planning into account which adversely affected the ministry’s performance. National Assembly Standing Committee on Commerce and Textile Chairman MNA Siraj Muhammad Khan made these remarks during an exclusive chat with Customs Today. Siraj said that the committee held its meeting which was, though, an introductory one, the participants discussed the performance of the previous government at length. “I am confident that the Commerce Ministry under the leadership of Khurram Dastgir will take tangible initiatives which will be fruitful for both the country as well as the businessmen,” he expressed. He pointed out that the committee was carefully observing working of the ministry and would strive to ensure adherence to rules and regulations. “Now the government has to spend huge funds on various approaches to offset the past damage and build the ministry’s capacity,” MNA Siraj Khan added. The NA standing committee chief claimed that the committee was sparing no effort to get the ministry deal with multifarious challenges as textile and commerce was the backbone of national economy. “Look it is a hard fact that Pakistan’s economy is dependent on the commerce and textile and, we being members of this important committee, are working hard to strengthen the ministry to ultimately strengthen the economy,” he emphasised. MNA Siraj Khan said that the issue of Pakistan Central Cotton Committee (PCCC), a prestigious research organisation based in Karachi, was not yet resolved by the authorities concerned. The land where the PCCC was housed for more than 50 years was allocated for the US Embassy in 2005 while the KPT committed to providing Rs 589 million as compensation to PCCC. But later, KPT denied any commitment with PCCC due to which the research work on cotton is being hampered. PCCC has not been provided any land till now and the factual position is that PCCC moved to a rented house that was far smaller than its needs and absolutely insufKicient to accommodate PCCC ofKices and its institutes. PCCC moved to an even smaller location in September 2011. He said although Prime Minister Yousaf Raza Gilani had directed the KPT in 2005 but nothing was done in this regard. There is a dire need to facilitate all those departments related to commerce and textile, he stressed. Replying to a question, Siraj Khan argued that the time period for GSP Plus did not matter and what was needed was only to focus on the quality of export products. The committee had suggested spreading more awareness among exporters on GSP Plus by conducting seminars and other campaigns to build the capacity. There were a variety

of products which could be exported including the value-added goods which were on the top of the export list to fetch precious foreign exchange for the country. “By the way, it will not be wrong if I say that Pakistan has all kinds of machinery like any European country for making quality cotton and textile products,” MNA Siraj opined, adding, “Pakistani manufacturers must maintain quality of products and the government should always keep national interest Kirst when it comes to free trade issue with other countries”. He also expressed his optimism about his approach that the bureaucracy would stand by the parliamentarians and extend full support in their endeavours to revamp the ministry in the greater national interest. “Mind that although I do not belong to Khurram Dastgir’s party, I admit the Commerce Minister is performing well and leading the ministry in the right direction. I am hopeful things will go better with the passage of time,” MNA Siraj Khan declared. He claimed that he was focusing on reducing expenses and directing the working of the committee in a constructive way. To a question regarding non-payment of taxes by Parliamentarians, MNA Siraj Khan suggested to the tax authorities, instead of wasting time on members of the National Assembly who were not more than Kive hundred, to focus energies on bringing non-registered factories, industries and rich class into the tax net. “There are more revenue-generating sectors in the country and the tax authorities should invest energies in the most potential but neglected sectors that can result in windfall tax revenue besides taxing those having accumulated wealth in foreign countries,” he explained and added that the government should evolve comprehensive strategy on war-footings to increase and maintain foreign reserves. “The standing committee will keep a check on the performance of the ministry’s performance and will acknowledge them whenever and wherever it requires,” MNA Siraj declared, adding that they would always pinpoint wrongdoing and make positive criticism for creating healthy environment.

Siraj khan said that the issue of pakistan central cotton committee (pccc), a prestigious research organisation based in karachi, is not yet resolved by the authorities concerned. The pccc land was allocated for the uS embassy in 2005 while the kpT committed to providing rs 589 million as compensation to pccc. but later, kpT denied any commitment with pccc due to which the research work on cotton is being hampered.

www.customstoday.com

08 EDITORIAL

FEBRUARy 18 - FEBRUARy 24, 2014

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

ediTOriAL

Time is running out

fter passing first seven and a half month, the FBR has been left with no other option but to take corrective measures without wasting any time for making last ditch efforts for achieving highly challenging tax collection target of Rs 2475 billion on June 30, 2014. Chairman FBRTariq Bajwa has jolted the bureaucracy of tax collection machinery in recent weeks keeping in view performance of field formations in first six months of the current fiscal year with clear-cut intention to bridge the yawning gap on account of materializing the desired tax collection target.The performance of FBR in first half of the ongoing fiscal year was dismally low, indicating that it was lagging behind in achieving its tax collection target. Against the envisaged tax target of Rs 2,475 billion, the IMF’s fiscal department high-ups have projected that the FBR would be able to collect Rs 2345 billion in the current fiscal year, indicating that FBR collection will face a shortfall of Rs 130 billion against its actual target of Rs 2475. Although, the FBR has not revised downward its annual target from Rs 2475 billion to Rs 2345 billion so far. But interestingly, FBR’s collection stood at Rs 1030 billion in first half of the current fiscal year, which was exactly in accordance with the IMF’s projection for first six months that also stipulates that FBR’s collection can approximately go up to Rs 2345 billion instead of Rs 2475 billion keeping in view track record of first six months. With the reshuffle in the FBR especially in LargeTaxpayer Units, RegionalTaxpayer Units and Customs Collectorates, the tax machinery netted Rs 168 billion in January this year compared to a collection of Rs 132 billion in the same month of the last financial year, registering a growth by 26 percent. In remaining five months (Feb-June) period of the current fiscal year, the FBR will have to collect Rs 1265 billion for achieving its desired tax collection target of Rs 2,475 billion on June 30. In case of netting Rs 2345 billion, the FBR will have to collect Rs 1125 billion in Feb-June period of the ongoing financial year.Without taking corrective measures at this juncture, it will be a big achievement of the FBR even to touch Rs 2,345 billion on June 30 instead of eyeing a collection target of Rs 2475 billion.The approach of right person for the right job can deliver goods in the FBR at this point of time.The Chairman FBR has made reshuffle in the FBR with the same intention especially in major revenue spinner business hub like Karachi, Islamabad and Lahore. With induction of RehmatullahWazir as Chief Commissioner at LTU Karachi, it is expected that the FBR will be able to bridge the revenue gap in the second half of the current fiscal year. By improving tax administration through ensuring effective enforcement on collecting withholding tax, creating demand and collection of taxes, recovery of arrears, resolution of lingering legal disputes involving billions of rupees, controlling smuggling and other prerequisites are important for achieving the desired tax collection target of Rs 2475 billion for the current fiscal year.

Ambitious plan of increasing foreign reserves ISLAMABAD

SM HAider

www.customstoday.com

n the wake of high optimism shown by Finance Minister Ishaq Dar to increase foreign currency reserves up to $10 billion by end March 2014 seems highly ambitious one keeping in view more outKlow for repaying the previous IMF loans than inKlows pouring in through installments under existing Extended Fund Facility (EFF). At the moment, the foreign exchange reserves held by the State Bank of Pakistan nosedived to $2.8 billion, lowest ebb in last one decade, and foreign currency held by the commercial banks around $5 billion. Any expectation of increasing foreign exchange reserves by more than $2 billion requires smooth planning and its timely execution on all fronts to achieve the desired results. Till September 2014, there will be more outKlows of dollars paying back the previous loans than inKlows so the government will have to come up with feasible plans to materialize its dream into a reality. To review external Kinancing situation, Senator Dar reiterated that with our sincere efforts we will take the foreign exchange reserves to more than $ 10 billion by the end of March, 2014 and around $ 16 billion by the end of December, 2014. For delivering on this front, the PML

(N) led government will have to implement its ambitious privatization plan, launching international bonds, recover outstanding amount from Etisalat on account of PTCL privatization, auctioning of next generation technology (3G or 4G), ensure restoration of budgetary support from World Bank, Asian Development Bank and other bilateral donors with immediate effect. There are many ifs and buts in achieving the desired results. The Finance Ministry argues that International Financial Institutions (IFIs) have reposed their conKidence in the policies of the present government and expressed that the economy was now moving in the right direction. On other side, the IMF states after the second review held at Dubai that the Fund mission recognizes the authorities’ resolve to pursue agreed structural reforms to enhance medium term growth prospects and rebuild foreign exchange reserves to underpin investor conKidence. Timely implementation of reform measures articulated in the National Energy Policy is of high priority in ensuring affordable and reliable supply of energy. Recognizing that Kixing Pakistan’s energy problem calls for a medium term strategy of sustained reform, the authorities agreed to press forward with efforts to improve energy sector governance, promote private investment in electricity power generation and modernization, and transition to a market-based system

of gas pricing. Furthermore the government’s privatization agenda remains on track with capital market transactions for some companies, investments by strategic investors in others, and restructuring to improve resource allocation and limit poor performance. Decisive efforts to broaden the tax net through the elimination of tax exemptions and loopholes granted through Statutory regulatory Orders (SROs) are critical to the future of Pakistan’s economy. The IMF also says that the authority’s reform program remains broadly on track, with the government meeting all of the quantitative performance criteria by end December 2013, with the exception of the targets on SBP’s net swap/forward positions and the ceiling on government borrowing from SBP. The authorities have reafKirmed their commitment to adopt the necessary corrective actions, including measures to improve the Kinancing of government debt through a medium-term strategy of institutional development and deepening of the government’s securities market. Progress on the unwinding of the SBP’s swap/forward positions to reach program limits is underway, and progress on this front is satisfactory so far. Now it is high time to make realistic plans on increasing dwindling foreign currency reserves instead of making plans contrary to the ground realities.

now it is high time to make realistic plans on increasing dwindling foreign currency reserves instead of making plans contrary to the ground realities

www.customstoday.com

NATIONAL

FEBRUARy 18 - FEBRUARy 24, 2014

cement industry asked to pay 17pc ST on retail price basis

ISLAMABAD: In pursuance of Finance Act 2013, the FBR directed the Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) to collect sales tax from cement industry at the rate of 17 percent on retail price basis from June 13, 2013. The board has also conveyed to cement manufacturers to pay sales tax at the rate of 17 percent. According to the instructions issued to LTUs and RTOs, with effect from June 13, 2013, cement is chargeable to sales tax at the rate of 17 percent on retail price basis.

Flour millers seek exemption from 6pc import duty on wheat he government should exempt flour millers from 6 percent import duty on wheat grains to export wheat after value addition as Pakistan has developed sufficient indigenous infrastructure which could cater to the need of the entire Asia. Pakistan Floor Mills Association (Punjab Zone) Chairman Mian Riaz stated this while talking to CustomsToday exclusively. “Currently wheat is cheaper in the international market and is not being exported as Russian states are offering the commodity on very low price.Therefore various countries like Afghanistan prefer grain purchase from them,” he pointed out, adding that even Indian wheat was cheaper as compared to Pakistan. The PFMA (Punjab Zone) chairman maintained that India had offered a flexible policy to its millers who need to export 15,000 tonnes of wheat if international market plunges, then the government offers rebate to its millers, adding that if Indian millers record deficit, the government allows them import of the commodity. “If we want to import Indian wheat it will cost just Rs26 per kg while our government is selling us the same quality wheat at Rs33 per kg,” PFMA senior leader Asim Raza said. —CT Report

DI&I Balochistan claims substantial seizures during ongoing campaign irectorate of Intelligence and Investigation (DI&I) Balochistan has claimed to have confiscated a substantial amount of smuggled goods worth millions of rupees during last two months in its ongoing campaign against smuggling. The department has seized 2250 kilograms of Cannabis seeds besides other contraband drugs. Seized items include dozens of smuggled vehicles and a large quantity of highly expensive cloth. According to official sources, these have been confiscated at different parts of Balochistan during last two months. Consequent upon seizures, cases have been registered and efforts are afoot to nab prime culprits behind illegal trade. On the directives of Director General of Intelligence and Investigation Federal Board of Revenue, a vigorous campaign has been launched with concerted efforts against smuggling from PakIran and Pak-Afghan borders. In this regard, DI&I, Balochistan has adopted zero tolerance approach against offenders. In pursuance of the directions, the DI&I Balochistan has fully mobilised its limited resources to combat the smuggling activities. As a result of efforts, the DI&I had yielded substantial upshot during its ongoing antismuggling drive. —CT Report

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

pakistan post yet to remit rs9.84m to fbr

KARACHI

cuSTOMS TOdAY repOrT www.customstoday.com

uring the audit of account of the Postal Appraisement Department for the period of the last quarter of the Kiscal year 2012-13, Federal Board of Revenue has detected that Pakistan Post OfKice illegally retained around Rs 10 million, while deducting taxes on delivery of parcels, ofKicial sources said. According to an audit report, the postal authorities deducted the amount of Rs 9.84 million as duties, sales tax, federal excise duty, withholding tax and special excise duty, while delivering the parcels during the Kiscal year 2012-13 but the same amount was not remitted to the FBR account. Pakistan Post is bound under a

notiKication issued in February 1983 that duty and taxes assessed by the ofKicers of Pakistan Customs on the parcel bills should be recovered by the postal authorities from the persons at the time of delivery. Pakistan Post is also liable to get veriKied each bill, involving duty and taxes from the Customs ofKicers to settle down the accounts between the two departments. The ofKicials said that in June 2002, further changes were brought in the law and the director accounts of Pakistan Customs was made responsible to issue payment details to be recovered from Pakistan Post on a quarterly basis and on the details, the senior post master made responsible to issue cheque of the same amount. The ofKicials said that during the audit of account of the Postal Appraisement Department for the period of the last quarter of the Kiscal year 2012-13, it was discovered that

Pakistan Post is also liable to get veriﬁed each bill, involving duty and taxes from the Customs oﬃcers to settle down the accounts

the amount was not remitted that was deducted under the heads of duties, sales tax, federal excise duty, withholding tax, special excise duty and other to the Collector of Customs (Preventive) Karachi. The audit observed: “The irregularity resulted in irregular retention of the government revenue worth Rs 9.841 million.” A correspondence of the Postal Appraisement Department responded to the audit observation that the less amount remitted was due because the postal authorities detected 14.52 per cent as service charges on each delivery made. The department said that the deduction was made with the approval of the Ministry of Finance through a letter issued in 1989. Interestingly, the department informed that neither the Appraisement Department nor the Pakistan Post had copies of such approval to substantiate the claims.

integrated border management system To, Prime Minister of Pakistan Mian Nawaz Sharif

Respected Sir, I would like to request you to please issue directives to expedite the pace of ongoing trade with India through Wagha Border. Early implementation of a well-tailored and well thought-out Integrated Border Management System at Wagha in consultation with all the public and private sector stakeholders is need of the hour. I, on behalf of the business community, wanted the government to introduce a new management system without any further delay so that the trade between Pakistan and India could Klourish. Since the present government had clearly given green signal for increasing trade activities with regional coun-

tries particularly with India; therefore, all the public and private sector entities should be on the same page so that a collective approach and wisdom could be applied to put the Pak-India trade vehicle in top gear. Dry ports should be activated

instead of managing trade activities at border. Trucks should be given access to dry ports to complete the procedural formalities before going to border terminal to avoid long queues. In Amritsar, large hotels are being constructed as Indian government expects large inKlux of businessmen and tourists from Pakistan. Similarly, Government of India had also formed the Land Port Authority for regulating and facilitating the trade through land routes. Keeping in view, the importance and worldwide recognition of regional trade, Pakistani government should also develop required infrastructure at the border terminal. The two governments have announced to keep the border open for 24 hours, for trade and business. Therefore, it is very crucial to take immediate steps for

creating a trade enabling environment at the Wagha Border. Despite infrastructure and scanning related hazards, there is a list of 137 items which are tradable through land route and this list is going to be increased to 500 items very soon. It will become much difKicult for the terminal staff to handle more goods. Instead of scanning all the goods going across the border the search should be done randomly to save time. A trust should be formed like Karachi Port Trust to handle the operations at the Wagha Border trade terminal while the security arrangements could be handed over to any law enforcement agency like Rangers. Regards, Mian Tariq Mishbah, Lahore

www.customstoday.com

10 PICTORIAL

FEBRUARy 18 - FEBRUARy 24, 2014

pakistani arrested with heroin concealed in oranges

COLOMBO: Sri Lankan customs officials have arrested a Pakistani national trying to smuggle heroin hidden in oranges at Bandaranaike International Airport. Narcotics Control Unit of Sri Lanka Customs arrested the 64year-old Pakistani man with the heroin stash at the airport after he arrived in a Sri Lankan flight from Karachi. The suspect was in possession of 984 grams of heroin concealed inside 12 oranges which were among 72 oranges in a nylon polythene sack.

Deskaudit:FBRchiefwantsprocesscompletionby28th

ISLAMABAD

cuSTOMS TOdAY repOrT www.customstoday.com

Sectoral analysis would also be carried out of major revenuegenerating sectors

ith a view to boosting revenue collection from corporate sector, Federal Board of Revenue (FBR) Chairman Tariq Bajwa directed completion of desk audit of corporate sector by February

28. As per details, the FBR chairman, during his recent visit to large taxpayers unit (LTU) Karachi not only inspected the performance of the LTU but also took some decisions to improve collection from the Karachi-based corporate sector. He directed that it was imperative that sectoral analysis be carried out of all major revenue-generating sectors such as banking, oil and gas, cement, sugar, automobile, textile etc.

He asserted that the exercise would not only result in bench marking of each sector but would also help compare the performance of major taxpayers viz-a-viz their respective sectors. On the occasion, the FBR chairman directed the LTU Karachi Chief Commissioner that sectoral analysis be completed forthwith as reports generated would be reviewed during the next meeting and behavior of the top twenty revenue spinners of Income Tax,

Sales Tax and Federal Excise being assessed in respective zones be analyzed. Tariq Bajwa also directed that a comprehensive exercise on forecast of payment in advance tax by the banks for the period January 2014 to June 2014 should be carried out which, he said, would help project the collection to be made from the banking sector at LTU Karachi during the remaining two quarters of the current Kinancial year.

LAHOre: Prime Minister Nawaz Sharif addressing at the 37th FPCCI Export Awards ceremony.

iSLAMAbAd: Finance Secretary listening to the speech of Finance Minister at the ceremony.

iSLAMAbAd: Finance Minister talking with media along with ADB Vice President Wencia Zhang during an MoU signing ceremony between ADB and Pakistan for Jamshoro Power Project.

www.customstoday.com FEBRUARy 18 - FEBRUARy 24, 2014

kcci for enhancing goods transportation by rail

KARACHI: Karachi Chamber of Commerce and Industry has suggested shift of bulk goods transportation from road to rail. Chairman KCCI Special Committee on Budget, Qamar Usman noted that more than half of trade deficit is on account of petroleum imports where 50 per cent plus of it is diesel. He said that 95 per cent of bulk goods transportation is done by road and road transport runs on diesel. Transportation of goods through rail network can reduce import bill of diesel by 30-40 per cent.

CARTOONSSPCEIAL 11

www.customstoday.com

FEBRUARy 18 - FEBRUARy 24, 2014

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