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pAKISTAN’S fIRST INdepTH NeWSpApeR ON CuSTOmS
vol 2 Issue No. 18
Karachi, Tue may 20 - mon may 26, 2014
Weekly
Regd. No, mC-1381
Price Rs. 50.00
RevIvINg pORTS & SHIppINg
Efforts undertaken for the revival of the Ports and Shipping Ministry and National Shipping Corporation have started bearing fruit, says Kamran Michael. | See pAge 06 |
Abdullah Zaki terms the issuance of valuation guidelines as ‘unjustified’ act SOHAIL RAB KHAN
ReJeCTINg RevIeW
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J Compensation amount is to be reckoned from the date of deemed assessment and not from the date of any order for issuance of refund passed belatedly by the department, rules FTO. | See pAge 03 | eNdINg exempTIONS
FBR is ready to phase out SROs equal to 1 per cent of GDP during three years, starting from the upcoming budget, says FBR Chairman Tariq Bajwa. | See pAge 05 | CLeARINg ATT CARgO
Processing and clearance of Afghan transit trade cargo of all types and Nato forward cargo from Karachi is functional under WeBOC, says Member Customs | See pAge 04 |
ustifying the issuance of valuation guidelines, Collector Model Customs Collectorate of Appraisement-West Muhammad Saleem has said that these guidelines of more than 200 items were issued by Pakistan Customs after thorough study of prices in international market. On the other hand, KCCI president Abdullah Zaki termed the issuance of valuation guidelines as ‘unjustiPied act and a way to increase smuggling activities’. Sharing his viewpoint exclusively with Customs Today, Collector Muhammad Saleem claimed that misuse of customs values has been completely eliminated with the issuance of valuation guidelines at Pixed prices while tax evasion was being witnessed at large scale before the issuance of these guidelines. Keeping in view the major shortfall in imports, FBR and Pakistan Customs took this step for elimination of corruption, he maintained. “We do not take any action against the legal trade and import, but at the same time we don’t allow anyone to dent the national exchequer through tax evasion, mis-declaration or underinvoicing,” he elaborated. He claimed that importers and clearing agents with the connivance of lower Customs staffers had been clearing their consignments on low prices. The high-ups of Pakistan Customs and FBR witnessed the mal-practicing of importers and lower Customs staffers and therefore, decided to issue constant/invariable Customs values of the imported items, so that no one can harm the
trade and national exchequer. Replying to a query, Muhammad Saleem made it clear that the customs values of more than hundred items have been changed after a period of about 10 years. Collector MCC Appraisement-West also denied the allegations levelled by importers and clearing agents that the guidelines have not yet been implemented at all the dry ports across the country. “The recently issued valuation guidelines have been implemented at all dry ports, along with Karachi ports,” he asserted. “No unjustiPied and unnecessary steps are being taken by Pakistan Customs in order to spoil the trade activities. However, importers and traders for their vested interests are manoeuvring the issue and misguiding the people,” he added. See page 03
We don’t allow anyone to dent the national exchequer through tax evasion, mis-declaration or under-invoicing
— Exclusive Customs Today photo
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NATIONAL
MAy 20 - MAy 26, 2014
ANf Lahore seizes charas, opium, arrests 4
LAHORE: Anti-Narcotics Force has arrested four drug traffickers while seizing opium and charas worth millions of rupees. ANF Lahore arrested a man and recovered 4.8 kg opium from his possession and recovered 6 kg opium and 6 kg charas from another person. Two more persons including a female were arrested and 8.4 kg charas was recovered, which was concealed in 7 packets, each weighing 1,200 grams. ANF Lahore also intercepted a parcel destined for UK and recovered 800 grams of heroin. Drugs were concealed in 81x menu cards of restaurant.
Collectorates alert FBR to scrutinize 60‘suspicious’ companies odel Customs Collectorate of Appraisement-West and the Model Customs Collectorate of Appraisement-East have recommended to Federal Board of Revenue to check the status of around 60 manufacturers’ companies. Sources in FBR informed Customs Today that both the collectorates have referred FBR to check the status of around 60 manufacturers’companies through Inland Revenue.The companies were found suspicious on depositing duty/taxes throughout the fiscal year 2013-14. They further said that the information about the suspected companies has been sent to FBR episode-wise and Inland Revenue Services (IRS) has initiated an inquiry about the status of those companies.When contacted, MCC Appraisement-West Collector Muhammad Saleem confirmed the development made in this regard and said the Collectorate has sent the data of around 40 manufacturers’ companies to FBR for scrutinizing the revenue status, as those companies were found suspicious in submitting duty/taxes. To a query, Muhammad Saleem said that legal action would be taken immediately against those manufacturers in case something comes out in the inquiry report by IRS.“The overdue amount in share of customs duty, sales tax and income tax would be recovered immediately from those manufacturers, who would be found involved in tax evasion,” he added. —CT Report
Imfcutspakistan'staxtargetbyRs75b Decisive efforts to broaden the tax net and develop a more efficient and equitable tax system with adequate enforcement mechanism remain essential to provide the necessary resources to infrastructure and other critical areas such as health and education
Absence of tabulation in DTRE, Appendix-I form incurs huge revenue loss ederal Board of Revenue is facing huge revenue loss due to the absence of tabulation for determining the values in terms of customs duty, sales tax, income tax, federal excise duty and other taxes in the application form for Duty Taxes Remission on Export (DTRE), Appendix-I. Sources in FBR informed Customs Today that the non-appearance of said tabulation in DTRE, Appendix-I is resulting in incorrect valuation due to which massive loss is rendered to national exchequer. They further told this scribe that the Director, Input-Output Co-efficient organization (IOCO) has forwarded proposals for making amendments in DTRE, Appendix-I to FBR Headquarters, Islamabad for immediate redressal. It is pertinent to mention here that the exporters by taking advantage of the said scenario have imported substantial quantity of raw materials and re-exported them to other countries. —CT Report
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— Exclusive Customs Today photos
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BR’s tax target has been revised downward from Rs 2,345 billion to Rs 2,270 billion for outgoing Piscal year 2013-14. The IMF and Pakistan have agreed to slash down the FBR’s target in the context of appreciation of rupee against dollar that negatively impacted the tax revenues to the tune of Rs 70-75 billion. “FBR’s target has been slashed down by Rs 70 billion and Pixed at Rs 2,270 billion from earlier revised target of Rs 2,345 billion,” Federal Finance Minister Ishaq Dar told a news conference along with the IMF’s Mission Chief Jeffrey Franks. According to the IMF statement, saying that an International Monetary Fund (IMF) staff mission, led by Mr. Jeffrey Franks, visited Dubai during May 1-9, 2014 to conduct discussions on the third review of Pakistan’s SDR 4.393 billion (about $ 6.6 billion) Extended Fund Facility (EFF), approved by the Executive Board of
the IMF on September 4, 2013. tor rising. However, core and headline The mission met with senior ofPi- inPlation are also rising. Led by large cials from the Ministry of Finance and scale manufacturing and service secthe State Bank of Pakistan. At the tors, GDP will expand by about 3.3 conclusion of the mission, Mr. Franks per cent in Fiscal Year 2013-14, acissued the following statement in Iscelerating further to reach 4 per lamabad: “The IMF mission held cent next Piscal year. An improveconstructive discussions with ment in the balance of payments government and central situation along with the aubank ofPicials on the thorities’ efforts to build economic performup reserves are yieldance under the EFF ing tangible gains in program and is enincreasing SBP refBR’s target has couraged by the serves and stabibeen fixed at Rs overall progress lizing sentiment made in pushing in the foreign ex2,270 billion from ahead with polichange market. cies to “The authoriearlier revised strengthen ties’ reform protarget of Rs 2,345 macroeconomic gram remains stability and revivbroadly on track. billion ing investment and They have met all growth. The mission end-March 2014 perreached staff-level underformance criteria with standings with the authorities the exception of the target on on a set of economic policies detailed Net Domestic Assets of the central in an updated Memorandum of Eco- bank, which was missed by a small nomic and Financial Policies,” the margin. The indicative target on sostatement said. cial transfers to the poor under the “Economic indicators are gener- Benazir Income Support Program ally improving, with growth gaining (BISP) was also met. The mission momentum, external Pinance im- welcomes the government’s efforts proving, and credit to the private sec- to deepen its support to the poor
Importers irked by higher valuation KARACHI
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akistan Customs authorities are determined to reduce the massive difference between the revenue collection and the revenue target set by the Federal Board of Revenue for the fiscal year 2013-14 through exercising all its available powers, which is badly affecting the trade and import activities in the port city. The importers and traders have expressed their deep concerns over the two major prevailing issues pertaining to inclusion and mentioning the weight of essential packing separately in examination report as gross weight and charging of the consignments accordingly. Secondly, the importers have complained of the issue of implementation of 133-items valuation guidelines which have higher
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values than before for clearance of consignments at Karachi Port.The importers and traders were of the view that those two issues pertaining to trade were badly affecting the import activities on port as on one hand Customs authorities were not abiding by the orders of Lahore High Court, in which it stated that the packing weight would not be included separately in assessable weight of the goods. However, the Customs authorities are still charging the consignments on gross weight instead of net weight. It is pertinent to mention here that the Lahore High Court in its verdict on May 3, 2014 through C M No 2/14 inWrit Petition No. 11795/14 has clearly ordered that the consignments would be assessed on net weight. Furthermore, the 133-items guidelines issued by Customs authorities particularly for clearance of consignments at Karachi Port were also creating impediments in clearance of consignments.
Talking to CustomsToday, the importers said that the guideline issue was affecting the trade and import at Karachi Port, as there was a major difference in clearance of consignments at Karachi Port than dry ports elsewhere.“The smuggling activities have been raised by the issuance of 133items guidelines, as the consignments have been cleared from dry-ports at difference in rates and then entering the city,” they added.They further said that the smuggled goods reach the dry ports through Bandar-Abbas border and after clearance reach Karachi. In this regard, Constitutional petitions under Article-199 of the Constitution of Islamic Republic of Pakistan have been submitted with Sindh High Court. It may be mentioned here that the Constitutional Petitions are in pending in SHC and the court has reserved the verdict on it and the difference of Customs values is being submitted to court.
through the BISP program, and the commitment to ensure timely payments to 4.7 million eligible families. “Fiscal performance was strong during the Pirst nine months of the year, but the government recognizes an emerging revenue shortfall in April and is committed to taking the necessary compensatory actions to assure attainment of the end-year dePicit target. Looking forward, the mission and the authorities agreed on the key revenue and expenditure measures to achieve a further reduction in the Piscal dePicit in FY 2014-15. Decisive efforts to broaden the tax net and develop a more efPicient and equitable tax system with adequate enforcement mechanism remain essential to provide the necessary resources to infrastructure and other critical areas such as health and education. “The mission urged the SBP to remain vigilant on recent inPlationary pressures in their monetary policy decisions, while continuing their ambitious program to rebuild reserves. For FY 2014-15, the authorities should target an additional reduction in inPlation towards their mediumterm goal of 6-7 per cent.
Budget preparation: FBR bars visitors’entry ue to heavy engagements of Chairman and Members of FBR in the Budget related exercise and for the purpose of maintaining secrecy, entry of the visitors in Board's premises is being restricted with immediate effect. FBR has issued notification in this regard. According to the notification following procedure shall apply until further orders: Only visitors of the Chairman/Members shall be allowed entry subject to the approval of the officers concerned. In case a visitor has prior appointment, the Private Secretary concerned will intimate the Receptionist to this effect well before time. —CT Report
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MAy 20 - MAy 26, 2014
gCC sets deadline for customs union implementation
KUWAIT: Gulf Cooperation Council has agreed to resolve the hurdles that are obstructing the implementation of a customs union that has been long delayed. January 1, 2015 has been set to be the date for having the first customs union implemented. By now an agreement has been made on every point on the agenda, including a way for distributing the revenue from customs (largest hurdle in the negotiations), questions pertaining to revenues, protectionism and dumping.
from page 01 eanwhile, President Karachi Chamber of Commerce and Industry (KCCI) Aamir Abdullah Zaki termed the issuance of valuation guidelines “an unjustified act and a way to increase smuggling activities”.The issuance of valuation guidelines of more than 100 items on a“plain paper”raised several questions in the minds of importers and traders about legality of these guidelines. Zaki while condemning the issuance of 133-items valuation guidelines by Pakistan Customs demanded of FBR authorities to withdraw the guidelines as it badly affected the trade and import activities. “Country’s imports are decreasing due to the issuance of valuation guidelines while smuggling activities are on the rise”, he added. President KCCI said that the biased attitude of Pakistan Customs-FBR officers concerned in implementation of valuation guidelines only at Karachi ports will definitely affect the trade activities.
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IOCO recommends fBR to change SROs 565,567,575 nput-Output Co-efficient Organization (IOCO) has forwarded recommendations to Federal Board of Revenue regarding change in concessionary regime/exemptions in SROs 565, 567 and 575. FBR sources informed CustomsToday that the SRO 567 related to the pharmaceuticals, containing a description of craft paper, which may be misused by the exporters through Duty andTax Remission on Export (DTRE), as they can sell the craft paper by exporting it through SRO 567 due to which national exchequer can suffer huge loss. They further informed that several anomalies have been witnessed through DTRE by taking advantage of concessionary SROs 565, 567 and 575.“The regulatory authorities through FBR have sent requests to IOCO in order to prepare effective recommendations on such issues and misuse of SROs, so that the national exchequer could be saved,” they added. Similarly, they further informed this scribe that the SRO 575 is also being misused by importing machineries and other equipments for sale. —CT Report
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FTO turns down FBR review petition ISLAMABAD
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he Federal Tax Ombudsman (FTO) while rejecting the FBR’s review petition against its earlier orders, ruled that the compensation amount was to be reckoned from the date of deemed assessment and not from the date of any order for issuance of refund passed belatedly by the department. As per details, in a review petition FBR contends that the FTO observations with regard to mode of reckoning compensation payment for delayed issuance of tax refund is not consistent with statutory obligation and applicable case law. However, the review petition in question has been rejected by the FTO. Commenting on the issue, tax experts are of the view that explanation to section 171(2) of the Income Tax Ordinance, 2001 inserted through Finance Act, 2013 as referred to by the department is effective from Tax Year 2014 whereas payment of compensation in this case relates to Tax Year 2009. Supreme Court of Pakistan also held that any executive order/notiPication that is detrimental to a taxpayer can have no retrospective application. The experts added that an assessment once Pinalised under section 120(1) of the Ordinance is valid for "all purposes" under the Ordinance. A plain reading of the text of section 120(1) of the Ordinance makes it abundantly clear that "all purposes" includes payment of refund and determination of compensation for any delay in making payment of refund, therefore, it is legally a perfect proposition that compensation amount is to be reckoned from the date of deemed assessment and not from the date of any order for issuance of refund passed belatedly by the department. The FTO order stated that departmental representative submitted that the due refund payable to the complainant for Tax Years 2007 to 2010 had been dis-
— Exclusive Customs Today photo
valuation guidelines: It’s about elimination of corruption
bursed by the Department. He also acknowledged that there had been a delay in the payment of refund and compensation would therefore be payable to the complainant, but the same would be payable in Tax Year 2009 only. However, he stated that the express direction given by the FTO to calculate amount of compensation payable to the complainant under section 171 of the Ordinance in Tax Year 2009 was not correct. In this context he drew attention to section 171 of the ordinance and the explanation added through Finance Act, 2013. Compensation payment under section 171 of the Ordinance was liable to be reckoned from the date of assessment under section 120(1) of the Ordinance and for purposes of calculating compensation amount the provisions of section 171(1) of the Ordinance may be read directly in conjunction with the provisions of section 120(1) of the Ordinance and that there was no need to take into account Clauses (a), (b) and (c) of sub section (2) of section 171 of the Ordinance. So far as legal matters are concerned, it goes without saying that the Pinal word
in legal matters is the exclusive domain of the Supreme Court. That does not mean that the adjudication on legal aspects of a case made by subordinate Courts / Tribunals have no relevance. LTU Lahore has allowed payment of compensation under section 171 of the Ordinance to M/s Tetra Pak Limited amounting to Rs90.03 million after the Company had sought the FTO’s intervention. In one case M/s SpelFujiya Ltd, paid compensation amount in excess of the refund paid to the company; the FTO observed. The department cannot blow hot and cold in the same breath. If it truly believes that compensation payment under section 171 of the Ordinance is to be reckoned from the date of refund order (even when that order is passed belatedly long after return of income was Piled declaring income and claiming refund and after assessment was made accepting the declared position as per return Piled) then it must follow that methodology in all cases. It cannot follow different methodologies of reckoning compensation in different cases when basic facts pertaining to delay in disbursement of refund are same.
Compensation amount is to be reckoned from the date of deemed assessment and not from the date of any order for issuance of refund
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04 NATIONAL
MAy 20 - MAy 26, 2014
fBR seizes Rs17m as tax from Sinaco Industries account
LAHORE: Federal Board of Revenue’s Regional Tax Office has recovered Rs 17,354,394 from account of Sinaco Industries Private Limited, a construction company, official sources said. The Board had issued a number of notices to the company informing it to pay tax for the Tax year 2012-13. Finally the Board seized the company’s account at the Meezan Bank Model Town branch recovering full tax owed to the national exchequer.
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www.customstoday.com entral region’s customs duty collection has increased by 9 per cent during the period from July to April during the Fiscal year 2013-14 as compared to the same period of Fy 2012-13. The Central region attained growth in customs duty collection by collecting Rs 27,140 million up to April 2014 against Rs 24,710 April 2013. According to official data, Model Customs Collectorate of Appraisemnet Lahore collected Rs 12,755 million this Fy against Rs 11,254 million last Fy, missing target by 7 per cent and achieving growth of 13 per cent when compared to previous Fy. The Collectorate of Preventive Lahore collected Rs 4,524 million during the period under review against Rs 3,645 million during the previous Fy. The collectorate achieved the set target of Rs 4,513 besides exhibiting growth of 24 per cent over the same period last Fy. The collectorate of Multan missed its target of Rs 8,912 million by six per cent collecting Rs 8,334 million customs duty from July to April Fy 2013-14 against Rs 7,669 million from July to April Fy 2012-13. Similarly, the collectorate of Fasilabad collected total customs duty of Rs 1,527 million during July to April Fy 2013-14 against Rs 2,142 million during the same period last Fy. The collectorate, not only missed its target of Rs 1,817 million by 19 per cent but also collected 29 per cent less customs duty than previous Fy. Inside sources said that the overall increase in collection of the customs duty in the Central region took place due to the Customs officials’ special measures. They said that rising tendency in tax collection is a good trend for any country because these taxes improve financial health of a country and public welfare. They said that customs duty collection can further be improved by encouraging the importers and exporters through reducing duty on various products. They said that this will help discourage smuggling which inflicts heavy losses on the businessmen doing business legally.
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27pcconsignmentsbeing clearedundergreenchannel, T NisartellsSenatebody
R&D Section of MCC Appraisement-East recovers Rs15.6m
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BR Member Customs Nisar Muhammad has said that the Pakistan Customs had framed and notiPied vide SRO 121(1)12014 new rules for Afghan Transit Trade and currently 27 percent of the imported consignments are being cleared under the ‘green channel’ facility of WeBOC clearance system. He was replying queries posed by members of the Senate Standing Committee on Finance regarding transportation of US/ISAF/Nato consignments back from Afghanistan to Pakistan. The FBR Member Customs said that the FBR had successfully launched WeBOC customs clearance system for reverse containerised US Army/ISAF/Nato cargo. “Pakistan Afghanistan Transit Trade Agreement (PATTA) was signed on October 20, 2010 and the FBR framed and notiPied rules for the agreement vide SRO 601(1)/2011 on June 13, 2011,” he informed. He said that the processing and clearance of transit cargo, to and from Afghanistan, was being done under 'One Customs system' until recently, under the aforesaid rules. Being a hybrid system, One-Customs was not fully automated and it involved both manual and computerised processes, Nisar Muhammad said. In view of the shortcomings associated with this system, FBR conceived a fully automated, end to
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ederal Board of Revenue regional tax office Wednesday recovered Rs 30 million from Jamal Re-Rolling Mills Badami Bagh. FBR sources said that Jamal Re-Rolling Mills Badami Bagh did not pay the tax for the Tax year 2012. The department had issued a number of notices to the taxpayer. However, upon non-compliance, the Board raided a United Bank Branch at the Badami Bagh and confiscated the Mills’account, recovering Rs 30 million. —CT Report
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end electronically integrated, swift and safe Customs Computerised System known as WeBOC system, for processing and clearance of Afghan transit trade cargo of all types. In order to implement the WeBOC system, new rules were framed and notiPied vide SRO 121(1)12014, the Member Customs elaborated. He said that FBR successfully launched the WeBOC system, under the new rules, in the different areas. The FBR Member Customs said that the WeBOC system for the processing and clearances of US Army/Nato/ISAF forward cargo from Karachi had been launched successfully since September, 2013. The WeBOC system for the clearances of forward containerised Afghan Transit Trade commercial cargo from Karachi has also been
he Research and Development (R&D) Section of Model Customs Collectorate of Appraisement-East has recovered an amount of Rs 15,590,381 in the month of April, 2014 from different importers in cases of violation of valuation rulings, misdeclaration, wrong use of concessionary SROs and in-admissibility of SROs. According to details, the R&D Section has recovered an amount of Rs 515,965 from M/s MinhasTraders on misdeclaration of quantity of timber; Rs 248,925 has been recovered from M/s Aman Enterprises on non-application of valuation ruling on steel wire; Rs 128,259 has been recovered from M/s Al-Hamad Business on non-application of valuation ruling on grinding disc. The R&D Section has recovered an amount of Rs 115,364 from M/s Manghal Trading on mis-declaration of Pakistan Customs Tariff (PCT) on fabric pieces; Rs 11,729 has been recovered from M/s Arahroma Pakistan on misdeclaration of PCT on Lyocol Dor; Rs 67,403 has been recovered from M/s Kashif & Co on non-application of valuation ruling on Sawn Timber; Rs 969,909 have been recovered from M/s MBI Industries Pvt on mis-declaration of classification of washer. The R&D Section has also recovered an amount of Rs 387,670 from M/s Zain Brothers on non-application of valuation ruling on second hand clothing; Rs 190,852 have been recovered from M/s Anis & Sons on mis-declaration of classification on miscellaneous goods; Rs 1,149,633 have been recovered from M/s Ali & Hammad Enterprises on mis-declaration of weight on miscellaneous goods. It has recovered an amount of Rs 1,046,474 from M/s Al-Razzak Fibers Pvt Ltd on withdrawal of concessionary SRO on cotton yarn; Rs 1,116,360 has been recovered from M/s ProsperityWeaving Mills Ltd on withdrawal of concessionary SRO on cotton yarn. —CT Report
launched from February 1, 2014. The WeBOC system for Reverse containerised US Army/ISAF/Nato cargo has also been launched from January 20, 2014. Nisar Muhammad informed the senators that a mechanism had been developed for the issuance of User IDs to Afghan traders, both provisionally and permanently and necessary training sessions had been imparted to the traders, transport operators, Customs agents and Customs staff, prior to the launch of WeBOC system. However, changes are being made in the WeBOC system to insert the following Modules/processes:- Forward Non-Commercial Transit Trade cargo from Karachi; Forward Commercial bulk, loose and non-containerised cargo from Karachi; Reverse commercial/non-commercial cargo (containerised, bulk and loose); Reverse US Military/Nato/ISAF bulk, loose and noncontainerised cargo; EDI between WeBOC system and Karachi Port Trust (KPT) Port Qasim Authority; Hooking up of tracking system software of M/s TPL with WeBOC system; Software for uploading of images of containers, seal and trackers at Karachi ports and exit stations; and Software for uploading the scanned images directly from the scanners in the WeBO. The FBR members claimed that since its introduction on February 24, new Afghan Transit Trade Rules had been functioning smoothly except some teething problems, adding that in fact the introduction of new rules under WeBOC system had made the processing and clearance of transit trade cargo faster.
NA body okays tariff structure for auto industry ISLAMABAD
fBR recovers Rs30m taxes from re-rolling mills
— Exclusive Customs Today photo
Central region’s duty collection target missed by 7pc
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he National Assembly Standing Committee on Industries and Production worked out a five-year new tariff regime for auto sector, presumably to bringing down rates imported and locally assembled cars, without taking FBR on board. Presided over by PTI lawmaker Asad Umar, the committee also recommended reduction in GST on tractors from 16 to 10 percent with a view to helping the local tractor industry flourish and benefit the farmers. The team of a headless Engineering Development Board (EDB) present in the National Assembly Standing Committee did not argue against or in favour of the tariff structure recommended by the members.The committee
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recommended that duty on localised parts be slashed from 50 percent to 30 percent and then to 20 percent.The committee underscored the need for redefining rates of duties on components, subcomponents and subassemblies that are presently subjected to 5 per cent, 10 percent and 20 percent, respectively, to 5 percent, 7.5 percent and 10 percent, respectively.The committee also recommended tariff for CKD components at 20 percent from prevalent 32.5 percent as the committee did not agree with 25 percent rate proposed by the sub-committee and strongly recommended a further reduction to help encourage local manufacturing and bring cost of locally produced cars down. On CBU, the committee recommended reduction in duty on 1800 CC and above cars from 150 percent to 100 percent, on 1600 CC and above from 75 percent to 50 percent and
up to 1600 CC from 50-55 percent to 35 and 30 percent in five years. The committee expressed annoyance at the EDB for granting licenses to those companies that do not have assembling plants. Briefing the committee, Federal Industries Joint Secretary Arif Ibrahim stated that the Ministry conceptually agreed to the new fiveyear tariff structure, cautioning that such a move will have a negative impact on revenue. With regard to quality of cars being assembled in Pakistan, he named a mode being assembled in the country which, according to him, should be a banned model. Asad Umar argued that if the government brings down tariff, it will certainly enhance the volume of sale of cars. On the occasion, EDB representative Ajmal Sharif assured the Standing Committee that amendments were being proposed to impose
a ban on licences to such companies. For such companies Nabeel Hashmi, a senior member of PAPAAM, uses the term "briefcase assemblers". The EDB representatives also failed to convince the committee as to why tariff was lower for the new entrants. Ajmal Sharif maintained that no new investor could compete with the existing OEMs which was why new entrants had been offered tariff incentives aimed at attracting new investment in the country. The committee chairman seconded the viewpoint of EDB, saying that protection to existing OEMs' was so heavily shielded that new players were reluctant to enter to come Pakistan’s auto sector. Prominent businessman and MNA from Chiniot, Qaisar Ahmad Sheikh also opposed a 150 percent duty on a import of cars, saying that only a few OEMs were benefiting from the prevalent tariff structure.
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MAy 20 - MAy 26, 2014
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Kyrgyzstan all set to join Customs union
BISHKEK: Kyrgyzstan’s government has approved a draft version of the road map to join a Russian-led customs union. The document will be submitted to lawmakers to be debated in the parliamentary committees on international affairs and fiscal policies. The government will continue working on the mechanism to finance the road map's implementation and adapting the Kyrgyz economy to customs union's regulations. Once the road map was approved by the government, it will be sent for approval by the union's member states-Russia, Kazakhstan, and Belarus.
FPCCI urges privatized customs laboratory at Karachi ederation of Pakistan Chambers of Commerce & Industry (FPCCI) President Zakaria Usman while lamenting the Pakistan Customs for not upgrading its customs laboratory during the last more than 60 years has urged FBR ChairmanTariq Bajwa to either upgrade it or allow the private sector for establishment of a state of the art modern laboratory at its Karachi Station, like private bonded warehouse, and facilitate the importers and exporters in speedy, hasslefree and reliable testing reports of their goods, particularly chemicals. He said this while inaugurating the meeting of FPCCI Standing Committee on Customs held under the Chairmanship of Saquib Fayyaz Magoon at Federation House Karachi.The Chamber President elaborated that the trader whose chemical has already been tested in the customs laboratory is again required to get it tested from some other laboratory such as Haji Ibrahim Jamal (HEJ) Institute, or PCSIR Lab, on the pretext that the results of the Customs Lab is not reliable, thus causing inordinate delay in clearance of goods and unnecessary financial burden and losses to the trader in the form of demurrage/detention charges. Zakaria Usman stressed the need of a transparent system wherein direct contact between a tax collector and taxpayer is minimized as it promotes corruption and tax evasion. He proposed,“There is no need of a separate full-fledged CustomsValuation Directorate General in this age of information technology”. He urged that in dispute cases, the trader should not be subject to demurrage/detention charges if he is not on fault. Zakaria Usman also urged to do away with the discrimination in duty and taxes, between industrial and commercial importers of raw-material as it is ultimately consumed by the industry- either cottage, small, medium or large scale. Referring to the gradual increase in the menace of smuggling, Zakaria Usman disclosed that it is mainly due to the higher rate of sales tax. —CT Report
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phase-wise withdrawal of SROs in the pipeline: Bajwa ISLAMABAD
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BR Chairman Tariq Bajwa said that the government could phase out exemption statutory regulatory orders (SROs) worth 0.9 to 1 percent of the GDP during three years, starting from the upcoming budget for 2014-15. He informed the Senate Standing Committee on Finance that the cost of exemptions was Rs480 billion which was approximately 2 percent of the GDP. When a committee member asked why the FBR was not withdrawing all the exemptions simultaneously, Tariq Bajwa said that if the government could withdraw all exemptions, the FBR would be happy. Later talking to media, he said that the FBR would phase out SROs worth one per cent of the GDP, amounting to approximately Rs 240 billion. “Certain exemptions cannot be withdrawn. There are exemptions granted under sovereign guarantees, international obligations and commitments. Exemptions are available to the Independent Power Producers (IPPs) or importers of crude oil. Exemptions are also available under the free trade agreements and preferential trade agreements. Total cost of customs duty exemptions incurred during July-February (2013-14) is Rs 21 billion. Tariq Bajwa informed the committee that a high powered committee was reviewing the entire SRO regime which is expected to furnish its report this week. The international trades as well as domestic taxpayers have to face an intricate regime of concessionary duties & taxes in the shape of differ-
ent SROs. These SROs constitute a complex de-facto tax structure to allow concession to different sectors based on different criteria each with its own regulatory and control management. However, the FBR has prepared a plan for rationalisation of concessionary regime and withdrawal of exemptions/SROs in respect of sales tax, customs duty and income tax which has been approved by the government. Meanwhile, the FBR chairman said that the board would propose to the government new budgetary measures for 2014-15 to increase the cost of non-active taxpayers as compared to a c tive/registered taxpayers. During a briePing to the Senate Standing Committee on Finance, he said that the FBR was working on different budget proposals to increase the cost of non-taxpayers as compared to the registered persons. He said that the board would incentivise people who were paying taxes and increase cost of doing business of those who were not paying any taxes. Tariq Bajwa informed the Senators that the contribution of direct taxes in overall revenue collection had increased signiPicantly during past few years, but base of sales tax had contracted due to shifting of serv-
ices to the provinces. He pointed out that historically, resources mobilisation efforts in the country had been low. mainly due to low contribution of direct taxes and higher reliance on indirect taxes especially imports related taxes. He informed that the government had taken tax policy and administrative initiatives to reduce reliance on indirect taxes. “Firstly, gradual reduction in the maximum statutory rates of customs duty from 125 percent in 1987-88 to 30 percent in 2013-04. Similarly, the contribution of customs duty in total collection has come down from 45.7 percent in 199091 to 12.3 percent in 2012-13. S e c ondly, the tax base of federal excise duty (FED) c o n tracted over the years and now is restricted to only few commodities like cigarettes, cement, beverages, international travel etc. The contribution of FED in the total collection has also dropped from 20 percent in 1990-91 to 6.2 percent during 2012-13. Thirdly, the base of indirect taxes particularly of sales tax has further contracted due to shifting of services to the provincial governments like telecommunication, banking and insurance services which were the major source of revenue of sales tax. Tariq Bajwa added that on the
Certain exemptions cannot be withdrawn. These are granted under sovereign guarantees, int’l obligations. exemptions are also available under fTAs and pTAs
other hand, contribution of direct taxes had increased signiPicantly during past few years. The share of direct taxes has increased from 19 percent in 1970-71 to 32 percent in 20002001. It has further jumped to 38 percent in 2012-13. The improved performance of direct taxes is mainly due to a number of reform initiatives undertaken in the past like introduction of USAS, promulgation of Income Tax Ordinance, 2001 where emphasis was shifted to voluntary compliance, automation of entire business processes and reduction of corporate tax rates from peak of 49 percent to 35 percent by providing level playing Pield to the taxpayers. The FBR chief informed the Senators also informed that out of 56,000 land transactions in Karachi, 28,000 had been carried out by nontaxpayers, rePlecting the level of undocumented property transactions. He said that 56,000 land transactions had been carried out in Karachi, of which half had been made by taxpayers and half by the non-taxpayers. On the occasion, Tariq Bajwa informed the Senate committee that the board was having difPiculty to achieve its target in the last quarter (April-June) of 2013-14 due to rupee appreciation. He, however, expressed his hope that the FBR was likely to collect Rs2270 billion to Rs 2275 billion by the end of current Piscal year. The FBR chief informed that the board had collected Rs1,575 billion as provisional collection during the Pirst nine months of 2013-14, showing a growth of 16.4 percent. He claimed that all taxes had recorded a doubledigit growth except customs duties that show a slight decline. The main reason behind the decrease is low growth in dutiable imports which is the tax base of customs duty.
pRv Section of mCC Appraisement-West recovers Rs20.1m KARACHI
CuSTOmS TOdAY RepORT www.customstoday.com
ost Release Verification (PRV) Section of Model Customs Collectorate of Appraisement-West has recovered an amount of Rs 20,124,450 in the period from April 1 to May 10, 2014. The PRV Section of MCC AppraisementWest has recovered the said amount by different importers in violation of PCT, nonimplementation of valuation rulings, taking wrong advantage of SROs and PCT classification. The PRV Section has recovered an amount of Rs 174,313 through Goods Declaration (GD) no 126288; Rs 338,353 through a GD no 99579; Rs 517,321 through
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a GD no 91726; Rs 150,147 through a GD no 94661; Rs 152,658 through a GD no 126173. The PRV Section has recovered an amount of Rs 110,709 by a filed GD no 124810; Rs 81,421 through a GD no 127707; Rs 27,140 through a GD no 128237; Rs 65657 by a GD no 127698; Rs 188,512 through a GD no 65949. It has recovered an amount of Rs 383,933 through a GD no 65952; Rs 381,594 through a GD no 65947; Rs 243,764 by a filed GD no 62338; Rs 242,172 by a filed GD no 76693. The PRV Section has also recovered an amount of Rs 35,157 through a GD no 59132; Rs 35,157 through a different GD no 62341; Rs 88,297 through a GD no 114021; Rs 34,927 through a GD no 76692; Rs 35,420 by a filed GD no 66115. The Section has recovered an amount of Rs 28,548 through a
GD no 49762; Rs 20,393 through a GD no 52901; Rs 79,009 through a GD no 80106; Rs 39,543 by a filed GD no 87581; Rs 9,814 through a filed GD no 129539; Rs 500,263 by a filed GD no 62468; Rs 9,689 through a GD no 63768; Rs 65,769 through a GD no 132014. It has recovered an amount of Rs 32,290 through a GD no 131995; Rs 19,050 through GD no 6968; Rs 41,070 by a filed GD no 1382; Rs 2,662,750 by a filed GD no 19888; Rs 776,582 through a GD no 8220; Rs 40,673 by a filed GD no 30085; Rs 20,434 through a GD no 45858; Rs 269,715 through a GD no 68251; Rs 178,382 through a GD no 83877; Rs 45,052 through a GD no 79379; Rs 187,392 by a filed GD no 70316; Rs 45,140 by a filed GD no 93561; Rs 46,410 by a filed GD no 65716; Rs 82,243 by a filed GD no 68190;
Rs 191,596 by a filed GD no 97342; Rs 484,749 by a filed GD no 9913. The PRV Section has also recovered an amount of Rs 681,558 through a filed GD#22365; Rs 648,444 by a filed GD#9636; Rs 461,957 by a filed GD#22371; Rs 208,321 by a filed GD#39838; Rs 484,318 by a filed GD#31744; Rs 242,183 by a filed GD#129703; Rs 422,527 by a filed GD#92342; Rs 42,700 by a filed GD#24996; Rs 174,740 by a filed GD# 48746; Rs 93,922 by a GD#135588; Rs 85,049 by a filed GD#131542; Rs 55,945 through a filed GD#130167; Rs 31,324 by a filed GD#120609; Rs 33,289 by a filed GD#22916; Rs 302,769 by a filed GD#82797; Rs 147,086 through a GD#134226; Rs 340,273 through a filed GD#76492. The Section has also recovered an amount of Rs 48,290 by a filed GD#73978; Rs
76,869 by a filed GD#88608; Rs 70,840 by a filed GD#84369; Rs 14,051 by a filed GD#79360; Rs 304,930 by a filed GD#99437; Rs 304,983 by a filed GD#103595; Rs 197,261 by a filed GD#99432; Rs 289,039 by a filed GD#116158; Rs 283,820 through a GD#121969; Rs 284,690 through a GD#119911; Rs 285,008 through a GD#135120; Rs 315,449 through a GD#97923; Rs 75,672 through a GD#125544. It has also recovered an amount of Rs 190,807 by a filed GD#93394; Rs 610,499 by a filed GD#126160; Rs 1,538,973 by a filed GD#127823; Rs 37,311 by a filed GD#133617; Rs 645,489 by a filed GD#103651; Rs 544,777 by a filed GD#134940; Rs 101,596 by a filed GD#6663; Rs 57,493 by a filed GD#125983; and Rs 226,990 by a filed GD#58486.
f ederal Minister for Ports and Shipping Senator Kamran Michael stated that the efforts undertaken for the revival of the ministry and National Shipping Corporation had started bearing fruit. “99.9 percent corrupt and negligent officials have been replaced with honest, able and dedicated officers and a foolproof system has been put in place to improve performance of the workforce.” Talking to CustomsToday during an exclusive interview, Senator Kamran Michael recalled that when he took over the office he had to surmount a myriad of problems ranging from administrative to financial.“The first step I took after entering the office was to get rid of the employees who had become burden on the ministry, particularly those with fake degrees sitting idle and receiving pay cheques while doing nothing,” he pointed out, adding that in the light of Supreme Court’s order, the Ministry of Ports and Shipping sacked 891‘corrupt and dishonest’employees. The minister informed that he was stunned when he came to know that these ‘dummy’ employees would remain absent from duty but other employees used to mark their attendance to avoid their wrath. Kamran Michael claimed that the incumbent government set the pace for the revival of the Shipping Ministry by showing the door to all illegally appointed employees, although political forces involved in this‘heinous crime’raised hue and cry, the government paid little attention to their‘traditional tactics.’ “We have almost complete the important phase of our revival programme – right man for the right slot - because no reform can succeed until eligible employees are brought to the fore,”he maintained, adding that biometric machines had been placed for attendance to eliminate the malpractice of fake attendance. To a query, about missing containers scam occurred in the tenure of the previous government, Kamran Michael declared that the ministry’s jurisdiction and responsibility ended where limits of the ports ended.“The ministry cannot be held responsible for the disappearance of containers during movement beyond its ports jurisdiction,”he pointed out, adding that the issue fell within the Customs Department’s ambit. The Port and Shipping minister quoted former FBR Customs member Ramzan Bhatti having told investigators that the customs officials had been involved in the scam. It is to be noted that the Customs Intelligence stopped investigation into the missing of 39 containers following the statement of American ambassador that none of the US containers had been missing. The Federal Shipping Minister revealed that he had strictly forbidden the practice of opening the cargo meant for Afghan TransitTrade at Karachi which the transporters used to do to save about Rs200,000. About steps taken to prevent containers theft, he said that
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mIAN SHAfQAT SAeed
ted appoin to y l l a g e l l on r to all i little attenti o o d e h nt paid wing t y by sho the governme r t s i n i cry, ing m e Shipp raised hue and h t f o l ime’ reviva for the his ‘heinous cr e c a p e set th ed in t nment l forces involv r e v o g t politica umben The inc es, although s.’ e c employ aditional tacti r ISLAMABAD ‘t their
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SPECIALREPORT www.customstoday.com
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To stop theft at ports, vigilance Cell has been established under the direct supervision of the Shipping minister
companies like PICT, KICT and QICT had installed 3D scanners at their own to scan containers, adding that 15 percent of export goods and 85 percent of import goods were being scanned before proceeding further. Kamran Michael regretted that cables of a scanner given by USAID to Customs and installed at Karachi Port Trust, had been stolen which could not be recovered to-date despite the lapse of a year. “To stop theft at ports,Vigilance and Anti-Encroachment Cell (V&AEC) has been established under the direct supervision of the Shipping Minister,” the minister informed, adding that the V&AEC had also been tasked with retrieving grabbed land of the Ports and Shipping Ministry from the mafia. He disclosed that 70 acres of land, 250 warehouses and 35 foundations had been retrieved by the cell from illegal occupation in different areas of Karachi including Machar Colony. “The land, warehouses and foundations will be auctioned to professionals and eligible persons in a transparent manner,”the Shipping Minister said, adding that a summary had already been sent to Prime Minister in this . Kamran Michael maintained that in the light of PM’s vision, the Ports and Shipping Ministry was working hard to complete Gwadar Port project with the cooperation from China.“$1.7 billion is being allocated for the development of road infrastructures, free trade zones, airport, free hospital, technical and vocational training centres, port infrastructures and designing,” he divulged and added that 3-d berth had already been completed and RO berth rolls on and rolls off were being developed at Gwadar Port. The Shipping Minister claimed that due to consistency in performance, once again 163 ships were being called at ports simultaneously. He boasted that the National Shipping Corporation (NSC) would add six oil-tankers into its fleet besides two more ships were being inducted into the fleet soon. Kamran Michael revealed that the ministry was going to introduce passenger cruise service for Hazara community from Karachi port to Iranian port of Chahbahar.“In fact the launch of the service will boost the public confidence in government,”he expressed his hope, adding that once the service was launched, a NSC ship would be able to carry 1,600 passengers altogether. The minister claimed that the ministry had taken all stakeholders including Customs, Immigration and FIA on board on the issue of launching the ferry service for pilgrims to Iran.“However, we are waiting for Foreign Ministry’s crucial back-up which in turn is waiting for green signal from Iran,” he quickly added. Kamran Michael said that apart from this service, his minister was contemplating launching ferry service for Hajj and Umrah to Saudi Arabia.“The Shipping Ministry has contacted the Ministry of Religious Affairs for the purpose and we have been assured of quota allocation from the next year,” he declared, adding that with the introduction of the service, people would be able to perform their religious obligations with a low cost. “It will certainly be a great achievement on the part of the incumbent government and the Ports and Shipping Ministry as well,”he concluded. www.customstoday.com MAy 20 - MAy 26, 2014
SPECIALREPORT 07
— Exclusive Customs Today photos
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08 EDITORIAL
MAy 20 - MAy 26, 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
A Questionable Target
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y considering assigning another ambitious tax collection target of Rs 2,800 billion for the next budget over two-time revised tax collection estimates of Rs 2,275 billion for outgoing fiscal year, Pakistan’s tax authorities will have to ensure an increase in revenues by 24 per cent in the upcoming fiscal year for materializing the desired target. Despite increasing GST rate by 1 per cent from 16 to 17 per cent in the last budget as well as enhancing rates of Withholding Tax, FBR’s revenues have increased with pace of 16 per cent in first ten months of the current fiscal year. So the FBR’s tax target for the next budget in the range of Rs 2,800 billion will be challenging task as the government holds no plan to raise tax rates in the next budget but broadening of tax base will be used as major source for achieving its desired inflation. With nominal growth rate of 13.2 per cent in the next budget as the government is going to envisage real GDP growth rate at 5.2 per cent and inflation at 8 per cent, FBR’s collection could go up to Rs 2,575 billion in the next fiscal year in case of using Rs 2,275 as base for fixing the next target. The elasticity of taxes will also help FBR to inch towards the desired tax collection target in the next fiscal year. In such scenario, the government will have to collect Rs 200 billion through elimination of tax exemptions, withdrawal of Statutory Regulatory Orders (SROs) and broadening of taxpayers by bringing 100,000 new people into tax net. The government is committed with the IMF to withdraw concessionary SROs in order to fetch 0.4 per cent of GDP into the national kitty. FBR will also abolish income tax exemptions worth 0.2 per cent of GDP in the next budget. With these two measures, the government is expected to fetch Rs 120130 billion in the next budget. The remaining Rs 100 billion collection will be achieved through improved administration of the FBR, creation of demand and settlement of cases out of courts. Some SROs related to trade will also be abolished in the next budget. The fiscal framework devised by the government will mainly depend upon FBR’s performance so the government will have to assign a realistic target to the tax authorities in order to avoid slippages in the upcoming fiscal year. In the outgoing fiscal year, the government has largely achieved its budget deficit through improved non tax revenues, surplus generated by provinces and slowing down of expenditures. But repeating the same practice might not be possible in the next budget so the government will have to maximize its tax revenues in order to protect its fiscal framework which will be an important subject to avoid derailment of the IMF program under which Islamabad is getting $6.67 billion from the IMF.
A glance at economic growth ISLAMABAD
Sm HAIdeR
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espite continuous load shedding of power, security concerns and structural weaknesses, the government has achieved a modest growth rate target of 4.14 per cent in its yearlong rule. Now the stage is set for materializing growth rate in accordance with the real potential of the country. During last week, the federal cabinet had approved three year framework under Budget Strategy Paper (BSP) in order to jack up the growth from over 5 per cent in 2014-15 to over 7 per cent in 2016-17. The country’s economic growth in the current Piscal year has shown an impressive contribution of construction and small scale manufacturing by witnessing growth of 11 per cent and 8.35 per cent respectively. IMF had projected the GDP growth for Pakistan at 2.8 per cent in its initial assessment which was revised upward to 3.1 per cent and again to 3.3 per cent during its recent review of Pakistan’s economy at Dubai from April 30 to May 9, 2014. However, in accordance with National Accounts Committee meeting, the growth in Gross Domestic Product (GDP) for 2013-
14 stands at 4.14 per cent. The National Accounts Committee has also Pinalized GDP growth Pigures for Piscal year 2012-13 and 2011-12 and came up with revised Pigures of 3.7 per cent for 2012-13 against provisional assessment of 3.8 per cent and 3.84 per cent in 2011-12 against initial assessment of 4.4 per cent. By lowering down the base of 2011-12, the overall growth for 2013-14 pushed up for 4.14 per cent. In order to achieve the GDP growth rate of 4.14 per cent, the contribution of agriculture sector stood at 2.12 per cent with contribution of 3.74 per cent growth of important crops; minor crops have registered negative growth of 3.53 per cent; cotton ginning and miscellaneous with negative growth of 1.33 per cent. The production of wheat crop has been estimated at 25.286 million tonnes; maize 4.5 million tonnes; rice 6.978 million tonnes; sugarcane 66.469 million tonnes; while production of cotton stood at 12.769 million bales in 2013-14. Livestock grew by 2.88 per cent in the current Piscal year; forestry by 1.52 per cent; and Pisheries by 0.98 per cent in 2013-14. The industrial sector growth was 5.84 per cent; mining and quarrying grew by 4.43 per cent; large-scale manufacturing
In order to achieve the GDP growth rate of 4.14pc, contribution of agri sector stood at 2.12pc
by 5.31 per cent; small scale manufacturing by 8.3 per cent; and slaughtering by 3.51 per cent. The electricity generation and gas distribution achieved a growth by 3.72 per cent against the revised estimates of negative growth of 16.38 per cent. The commodity producing sector grew by 3.94 per cent and services sector by 4.29 per cent in the current Piscal year. The wholesale and retail trade went up by 5.18 per cent; transport and communication by 2.98 per cent; Pinance and insurance by 5.17 per cent, housing services 4 per cent, general government services by 2.19 per cent and other services by 5.85 per cent in the ongoing Piscal year. The major investment has been witnessed in the construction sector with 50 per cent increase; 42 per cent growth in mining and quarrying; 14 per cent growth in small scale manufacturing. While in case of large scale manufacturing it nosedived by 23.7 per cent and public sector investment declined by 3.2 per cent. In the coming years, 3G and 4G spectrum auctions would help the government to accelerate economic activities in the country. Thus, it could be expected of the government to be able to achieve the country’s real potential of achieving growth in the range of 6 to 7 per cent over the next three year period.
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Customs court grants bail to six in betel leaves case
LAHORE: Special Judge Customs Tanveer Akbar has granted bail to six accused of customs duty evasion worth millions of rupees in betel leaves case. Earlier, the court had sent the six accused to judicial lock up. Customs Investigation and Prosecution department had arrested the accused on three days’ remand for recovery of taxes and documents from the accused before the court sent the accused into judicial lock up. The accused will have to appear before court in fortnight.
Preventiveassociation, club:PakCustoms Panelclean sweepselections akistan Customs Panel has won the elections of Preventive Services Officers Association and Preventive Customs Services Club for the year 2014-15 by clean sweeping its opponent, the United Panel. According to the details, the voting for the selection of office bearers of the Preventive Service Officers Association and Preventive Service Officers' Club for the year 2014-15 was scheduled on May 15 at Customs House and Air Freight Unit (AFU) of Jinnah International Airport, Pakistan (JIAP), in which the officials below Grade-15 including POs, SPO, IPSs, SPS and others exercised their right to vote. According to the consolidated results announced by the competent authorities, Aurangzeb Shah has been elected as President of Preventive Service Officers’ Association; Muhammad Aleem as Vice President; Mian Iqbal Javed as General Secretary; Syed Muhammad Irfan Ali as Joint Secretary; and Shahid Ahmed has been elected as Treasurer. Similarly, Kamil Hassan has been elected unopposed as Secretary Preventive Service Officers' Club for the second consecutive time and Nowsherwan Afzal has been elected as Treasurer Preventive Service Officers' Club. It is pertinent to mention here that the United Panel did not manage to win even a single seat either in the elections of Preventive Service Officers’ Association or Preventive Service Officers' Club. —CT Report
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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
76 illegal petrol pumps, depots demolished in crackdown KARACHI
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t least 76 illegal petrol pumps and depots in six districts of Karachi have been demolished in two days crackdown operation initiated by Pakistan Customs along with other law enforcing agencies including police and district administrations. This was revealed by Chief Collector of Enforcement-South Muhammad Nazim Saleem while addressing a press conference at Customs House Karachi. MCC Preventive Collector Syed Muhammad Tariq Huda, Customs Intelligence and Investigation Director Asif Marghoob Siddiqui, Commissioner Karachi Shoaib Ahmed Siddiqui, Malik Khuda Bux, Chairman of FPCCI Standing Committee on petroleum Sami Khan, Chairman Oil and Petroleum Association and other Customs ofPicials were also present on the occasion. Speaking at the press conference, Chief Collector of Enforcement-South Muhammad Nazim Saleem said that the South Region of Pakistan Customs on the directives of FBR Chairman Tariq Bajwa and Director General of Customs Intelligence and Investigation, Luftullah Virk has formulated a joint line of action in order to launch grand operation against illegal petrol pumps established in the vicinity of Karachi. “It was a peaceful and successful
operation in which 56 illegal petrol pumps have been completely demolished by the law enforcement agencies ofPicials while 20 sites of petrol pumps have been sealed temporarily, as they have produced legal documents of the petrol pumps sites. However, the authorities of Pakistan Customs are verifying the documents by Oil Marketing Companies (OMC) and dealers’ associations,” he added. Nazim Saleem further informed the media that 10 illegal petrol pumps have been dismantled in Hub area in the month of April and seized 26 pick-ups containing 80,000 litres of diesel in Dalbandeen, Quetta. “Total 360,000 litres of petrol and diesel have been seized by ofPicials during the crackdown on illegal
petrol pumps. The seized diesel/petrol has been auctioned to OMCs,” he further added. Responding to a query, Chief Collector informed that 150,000 litres of petrol/diesel was being smuggled in a day before initiating the grand operation against illegal petrol pumps, adding that the action has been taken against the illegal petrol pumps according to the Section (II) of the Customs Act, 1969. Nazim Saleem said that it was not a one-time operation against the illegal petrol pumps, while the regular episodes would be continued against those illegal petrol pumps. Answering to another question, Chief Collector Enforcement-South further informed that the process
of veriPication of 20 sealed petrol pumps would be completed by Additional Collector of HeadquartersI Shafqat Ali Khan Niazi within a week. Speaking at the press conference, MCC Preventive Collector Tariq Huda vowed that Pakistan Customs will free the Karachi from organized crimes and revive the past glories of the city. On the occasion, Huda thanked the Commissioner Karachi and ofPicials of Sindh Police for their all-out support with Pakistan Customs during the cleanup operation. Director Customs Intelligence and Investigation Asif Marghoob Siddiqui expressed his pleasure over the successful completion of operation against illegal petrol pumps.
Tyre importers demand relaxation in duty To,
Ishaq Dar Honorable Finance Minister, Islamabad Respected Sir, Import of tyre & tube is subject to highest tax slab and as such is most lucrative item of smugglers as evident from the fact that about 53% of its domestic demand is met through smuggling, 32% from import and the balance 15% from local production. This underscores the need to arrest the menace of smuggling through Piscal measures to encourage its legal imports as all the administrative measures taken so far have merely proved an exercise in futility and its smuggling continues unabated thus rendering the honest and legal importers uncompetitive against the smuggled ones besides making the national exchequer to suffer from a revenue loss of about Rs. 2.5 billion annually. At present, our petition is already pending be-
fore "National Assembly Standing Committee of Finance & Revenue" since Year 2010 with our genuine demand of relaxation of duty from highest slab of tariff. Our Association (Pakistan Tyre Importers & Dealers Association) urges honorable Finance Minister Ishaq Dar and Chairman FBR Tariq Bajwa to reduce tax structure. We earnestly request
for minimizing Valuation Ruling of tyres, so that incentive of smuggling can be curtailed and legal import can be increased. With profound regards, Sumaira A. Hussain, Secretary PTIDA, Karachi
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MAy 20 - MAy 26, 2014
SeCp proposes levy on foreign educational institutes
ISLAMABAD: In its proposals to FBR for Budget 2014-15, SECP has suggested imposition of tax on income of foreign educational institutions and similar non-resident entities providing different types of certificates, degrees or courses in Pakistan. The incomes of such non-resident entities and foreign educational institutions are not currently taxed in Pakistan. These institutions/entities are earning heavy fees/income from Pakistan. A new section is proposed to be introduced and the banking company needs to be appointed as the WHT agent.
KARACHI: Chief Collector Enforcement (South) Nazim Saleem addressing a press conference along with Commissioner Karachi, Shoaib Ahmed Siddiqui, Director I&I Asif Marghoob Siddiqui, Collector Collector of MCCPreventive S M Tariq Huda and other officials of Pakistan Customs.
WASHINgTON: Commerce Minister Khurram Dastgir Khan addressing the participants of Business Roundtable conference on the textile and apparel sector at United States Trade Representative (USTR) Office.
KARACHI: President KCCI, Abdullah Zaki presenting chamber’s crest to Director Customs Intelligence and Investigation Asif Marghoob Siddiqui during his visit to KCCI.
punjabtotaxbighouses,luxuryitemsinbudget he Punjab government will impose a new tax on big houses and luxury items in the next fiscal year, and rates of route permit and fitness certificate of vehicles will be increased with aim to enhance revenue. Punjab Finance Minister Mujtaba Shujaur Rehman expressed these views while presiding over a resource mobilisation committee meeting. MPAs - Sheikh Allauddin, Dr Nadia Aziz, Qamarul Islam Raja as well as secretaries and senior officers of the Finance, Excise and Taxation, Irrigation, Housing and Agriculture departments and the Punjab Revenue Authority chairman and Member Board of Revenue attended the meeting. He also said tax would also be imposed on restaurants of food streets, hotels, guest houses and private educational institutions. "Tax will also be collected from the owners having more than 12.5 acres of land, however, income limit would be enhanced. The government is making revenue collection system simple besides expanding tax net," he added. According to him, public welfare and development projects are completed through collection of taxes and the government will expand tax net for this purpose. Punjab Excise andTaxation Department will evolve a comprehensive strategy for evaluation of properties. Property and other taxes will be deposited online from any part of the province and problems faced by common man will be kept in view at the time of new taxation. —CT Report
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www.customstoday.com MAy 20 - MAy 26, 2014
TdAp to patronize agro-food sector on priority
ISLAMABAD: Agro Food Division of TDAP has geared up its efforts in order to give greater focus on the export of Agro-Food sector including fruits, rice, and meat and seafood. To improve the quality of the country’s agro-food products transfer of technology, improvement in hygienic conditions at production and packaging stage, as well as value addition will be focused. Various projects are being undertaken currently like initiating the process of setting up of Vapour Heat Treatment (VHT) plants.
CARTOONSSPCEIAL 11
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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