Granule duty anomaly: Revenue Board locks horns with BoI and NTC

The Central Board of Revenue (CBR) has locked horns with the Board of Investment (BoI) and the National Tariff Commission (NTC) on the issue of removal of anomaly in import duty on polypropylene granule - PCT 3902-1000 - basic raw material used by the local industry in manufacture of cement sacks.
According to the information collected by this scribe, in response to local industries' appeal, the BoI had directed the CBR to cut down duty on polypropylene granule - PCT 3902-1000 - raw material from existing 20 percent to zero level as was promised by the federal government in the previous budget.
The manufacturers' efforts to get import duty on their raw material rationalised through the National Tariff Commission (NTC) also met the same fate. The NTC seconded the BoI on the issue and recommended to the CBR to remove tariff anomaly in this case to protect the local industry but its direction also could not move the CBR.
The NTC recommended that it had conducted a detailed survey after receiving reports of anomaly in tariff from the local industry, which proved that polypropylene industry in Pakistan was at disadvantage due to higher duty of 20 percent on raw material and 25 percent on import of finished polypropylene woven sacks.
The NTC in its findings suggested that the case of the local industry was clear and higher duty on PTC 3902-1000 was 'discriminatory anomaly', which did not require any further analysis to make recommendations to tax authorities for reduction in duty on raw material used by the local polypropylene industry.
The government had announced in the budget 2003-04 that duty on import of any raw material would be 5 percent and promotion of local industry was the basic theme of the initiative.
But the CBR did not apply the rule in the case of import of PCT 3902-1000.
The polypropylene units took the issue with the Pakistan Polypropylene Woven Sacks Manufacturers Association (PPWSMA) to get implemented the government's decision announced in the annual budget of allowing import of raw material to all industries at the rate of 5 percent.
The PPWSMA raised the issue with the BoI and NTC for relief, saying, higher duty of 20 percent on its raw material was a negation of the government policy of promoting and protecting the local industry in the wake of changing world scenario.