Resolution of PALSP's issues: Govt to take ship-breaking industry's input

ISLAMABAD: The government would take the input of ship breaking industry before taking any decision in favour of the Pakistan Association of Larger Steel Producers (PALSP) for raising customs tariff on re-rollable materials, and change in taxation structure for the ship breaking industry.

Sources told Business Recorder here on Saturday that the PALSP had taken up the issue of ship breaking industry at a meeting held under the chairmanship of secretary Industries and Production (I and P) Division in the Committee Room of the Pak Secretariat.

According to the sources, the progress relating to the following issues being faced by members of the PALSP were discussed by the secretary general PALSP, and a representative of Karachi Steel.

The first issue was the removal of the tariff anomalies as tariff on re-rollable material (PCT heading 7204.4910) needs to be increased, and ship breaking industry only pays 80 percent sales tax as compared to 100 percent by the melting industry, the PALSP pleaded.

Contrary to this, the additional secretary-II, I and P Division, stated that the tariff needs to be seen holistically, so views from various relevant stakeholders including the ship breaking industry, need to be obtained.

It was decided in the meeting that the PALSP would provide the working papers and the proposed draft amendments in line with the provisions of the Sales Tax Act, 1990, and available previous instances in this division.

And for extended conversion, in accordance with it, a meeting with the ship breaking industry will be held.

The second issue was related to the non-adjustment of sales tax input since June 2019.

The PALSP showed its concerns on this long outstanding issue, and informed that stock taking earlier done by the FBR on June 30, 2019, so they requested for prompt adjustment of sales tax.

As per decision of the meeting, the secretary Industries and Production (I and P) Division instructed to forward a letter to the chairman Federal Board of Revenue (FBR) on this specific issue.

The third issue was the implementation of the quality standards through the PSQCA Act in Pakistan.

During the meeting, Yasin Akhtar, director PSQCA informed that in the meeting held on December 1, 2020 with the PALSP in the Ministry of Science and Technology, it was decided that existing licensing/marketing fee at the rate of 0.1 percent will be reduced, after formal approval from higher authorities, according to the different slabs amounts of prices.

The secretary general PALSP emphasized that the main objective should be to implement/enforcement of the PSQCA standards, and no compromise on quality should be made.

The secretary Industries and Production (I and P) Division emphasised to continue the conversation between the Ministry of Science and Technology and the PALSP on the steel-related issues, and when the Ministry of Science and Technology will share the said proposal of reduction in licensing and marketing fee, this Ministry will support the suggestions.

The fourth issue was that the FATA/PATA import of steel scrap is exempted in FATA/PATA from the federal excise duty (FED).

The representative from the FBR informed that this is a border monitoring issue and on the said issue, they are taking concerned Collectorates on Board, and the report will be finalised in the next week.

The section 40D is introduced in this regard and rules would be issued after approval.

It has been decided further progress will be considered in view of the FBR rules issued in this regard.

The fifth issue was the drafting of the National Steel Policy (NSP). The PALSP and the EDB stated that there should be NSP. It has been decided that the EDB will formulate and provide the NSP in the month of January, 2021.

The secretary general PALSP suggested that the sectoral experts groups should be made which will advise the government departments e.g. Planning Commission, the FBR etc on various issues decided that the terms of references (ToRs) will be designed by the PALSP, which will be shared with PIDE for further study. It was also decided that the next meeting will be held in the first week of January 2021.

Copyright Business Recorder, 2020