Overstayed items in bonded warehouses: FBR rejects amnesty for payment of dues

The Federal Board of Revenue (FBR) has rejected the demand of the Collectorate of Customs, Appraisement, Karachi, to grant general amnesty from payment of duties and taxes and demurrage on overstayed goods in the bonded warehouses.
In this regard, the board has issued instructions to the collectors of customs on Saturday. Sources said that the business community was persistently demanding from the customs authorities to streamline the system for removal or destruction of overstayed goods from bonded warehouses.
Taking into account the reservations of importers, the collectorate of Customs, Appraisement, Karachi requested the board to issue a notification for granting general amnesty for deteriorated/overstayed goods stored in the bonded warehouses.
Under various legal provisions of Customs Act, 1969 read with section 354 of the Customs Rules 2001, the collector is empowered to give remission of customs duty, federal excise duty and sales tax to a licensee of a manufacturing bond or a common bonded warehouse, sources said.
This is subject to the condition that the collector would grant remission in case the goods are damaged or destroyed by unavoidable circumstances or for causes beyond the control of the licensee.
Sources said that the collector would also have the authority to remit duties and taxes where the wastage of input goods, as determined in the Analysis Certificate, is destroyed or when goods procured are bona fide samples drawn or samples for study, testing or design.
Similarly, the collector is legally empowered to remit duties/taxes in cases where the input goods or finished goods that are rendered unfit for consumption or sale are destroyed in the manner as determined by the collector.
Therefore, the collectors are already empowered to remit such taxes on overstayed goods in bonded warehouses and grant of any general amnesty is not permissible, sources said.
The board has issued instructions to all the collectors of customs to immediately start an exercise to clear all pending cases where goods are being overstayed in bonded warehouses.
A detailed procedure has been prescribed in the instructions to complete documentation for clearance of goods at the bonded warehouses. For example, detailed inventory of such goods be made and other documents be scrutinised on top priority basis. To clear all issues pertaining to overstayed goods, the board has given deadline of October 31, 2007 to the regional collectors.
It is important to mention that the customs authorities and Federation of Pakistan Chambers of Commerce and Industry (FPCCI) had met recently in Karachi to resolve the problems of bonded warehouse operators. It was said that the licensees of private and public bonds, manufacturing bonds and diplomatic bonds were facing serious problems.
There were cases where goods were overstaying in the bonded warehouses for last many years, occupying valuable space. However, customs has not taken any decision on removal or destruction of goods. Most of the consignments have lost their inherent value and are fit for destruction. There are some items which have been now declared banned under import policy and whose duties have also changed.