The business community has alleged that the Directorate-General of Customs Valuation, Karachi, has unilaterally issued valuation ruling on customs duty assessment on import of certain goods, without obtaining viewpoint of the concerned associations.
During a pre-budget seminar, organised by Federal Board of Revenue (FBR) and Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday, representatives of trade bodies expressed concern over non-availability of forum for filing appeal against the valuation rulings of the directorate.
The representative of Lahore chamber said that the importers can not file appeal against the orders of DG Valuation. The rulings should not be issued without incorporating viewpoint of relevant association.
An advocate from Faisalabad was crying on the prolonged delay in issuance of sales tax registration numbers. He demanded that there should be some check on the Central Registration Office, FBR House, for timely issuance of sales tax registration numbers to new applicants.
Pakistan Pharmaceutical Manufacturers Association said that there is sales tax on packing material, but no sales tax on the end product. Sales tax on packing material is a purchase tax, whose burden could not be passed on to the consumers. The anomaly be removed inn the coming budget.
He said that the pharmaceutical raw materials and inputs should be included in the free trade agreements (FTAs) signed with different countries. He demanded import of pharmaceutical raw materials from India through land route. Through airlines, it costs a lot to the manufacturer. Muhammad Aslam, a cloth dealer from Rawalpindi, made hue and cry on the valuation advice for clearance of imported cloth on kilograms basis. He criticised the role of DG Valuation in this regard.
Zubair Tufail, from private sector, said that there was huge different in valuation of POL products being cleared from Karachi port and Quetta. The value for assessment of duties and taxes on POL products at Karachi is much higher against exceptionally low value at Quetta. An FPCCI representative said he detected an anomaly on the import of dyestuffs. Duty ranging between zero percent to 15 percent is being levied on the import of dyestuffs under different Pakistan Customs Duty (PCT) headings. Resultantly, the item liable to 15 percent duty is being cleared at zero percent due to large-scale under-invoicing. The PCT headings should be corrected to check this menace of under-invoicing.
Islamabad Chamber of Commerce and Industry demanded retention of income tax return form for at least five years. Every year new income tax return is issued by the FBR, which needs time for understanding both by the taxpayers and lawyers/consultants.
Munawwar Iqbal, Chairman, Pakistan Computer Association, briefed the FBR on the negative impact of sales tax on computer sector and demanded total withdrawal of sales tax on the industry.
The businessmen also demanded exclusion of bulbs, energy savers tubes etc from the Third Schedule of the Sales Tax Act, 1990. There is massive under-invoicing of such products, which needs to be controlled through proper valuation of imported goods. The representative of cutlery association from Wazirabad demanded compensatory rebate of 10-12 percent to save the domestic industry.
Pakistan Plastics Manufacturers Association raised issues pertaining to extraordinary increase in prices of plastics and impact of customs duty and sales tax on the overall price increase in plastic products.
Iftikhar Ali Malik raised several issues pertaining to customs duty on import of seeds, sales tax and income tax. He suggested measures to increase the number of filers of income tax returns.
The businessmen also raised the issue of corruption in the Customs Administrative Reform Project (CARE). It is very easy to clear consignments through CARE in connivance with customs officials against old system of 'group appraisers' where experts were dealing with import of different commodities. Presently, ports are clearing the same item on different values for unknown reasons, they alleged.
Importers said that Benami imports were creating distortions in the taxation system. Data showed that 327 importers of Karachi, Lahore and Faisalabad imported goods in one year. Next year, percentage of importers of the same goods falls to 73 percent. The trend continues in the next years, reflecting drastic decrease in the number of importers engaged in the same goods. Later, 15 percent, then 9 percent, and in four years period the number of importers fell to 6 percent of the same goods. There is need to check Benami-imports taking place in the country.
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