Despite repeated complaints by the local industry, Customs Collectors are ignoring massive misdeclaration of customs duty on import of iron and steel items cleared through Customs Administrative Reforms Project (CARE) and other clearance systems applicable at ports.
Tariq Irshad, president of Iron and Steel Merchants Association, Karachi, told Business Recorder on Sunday that reforms were not showing any viable outcome as low-grade customs officials, including appraisers, were hindering smooth implementation of the ongoing reforms.
"Measures like automation and paperless environment, particularly of customs, have not made any headway, as all systems are being run by lower staff. Even the state-of-the-art clearance system like CARE is unable to check massive misdeclaration and under-invoicing, thus making millions of dollars investment redundant," he said.
He said that Siddiq Sons and other units had approached the Collector of Customs, Appraisement, Karachi, regarding the ongoing misdeclaration pertaining to import of steel. It has been noticed that commercial importers are importing ETP (customs duty 20 percent) under the cover of silicon steel sheets/coils liable to 5 percent minimum duty.
He said that the customs authorities and representatives had convened a meeting on February 19, 2007 to address the issue. At that time, the collector admitted that irregularities were observed during clearance of steel items, which needed to be checked.
The record of Customs House, Karachi, shows that during last two years there has been a sudden jump in the import of Silicon Steel Sheets/Coils--a basic raw material used in fans industry. It is alleged that cold rolled/hot rolled sheets (duty 20 percent) is also being imported as silicon sheets/coils while imports of cold rolled sheets and hot rolled have declined.
The production of the fan industry has not increased in proportion to the import of silicon sheets/coils. Contrary to this, there has been a substantial increase in the import of these items and there is a wide gap of 15 percent duty which has a lot of attraction for misdeclaration.
The Customs Collector, Appraisement, Karachi and Collector, CARE, Karachi have changed the procedure for clearing silicon sheets/coils.
However, misdeclaration of steel items has not been controlled by the concerned collectors. A few months back, a complaint on misdeclaration was lodged with the Collector, Port Qasim Authority, Karachi, but so far no action has been taken by the concerned authorities, he added.
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