Ship breaking industry: proposal for re-imposition of duty, sales tax opposed

Chairman of National Assembly's Standing Committee on Shipping and Ports, Rana Mehmood-ul-Hassan has opposed the proposed re-imposition of customs duty and sales tax on the ship breaking industry in the forthcoming budget and said that it would affect the already fragile ship-breaking industry adversely.
Rana Mehmood -ul-Hassan was of the view that some lobby of direct steel importers were employing their influence to increase GST and sales tax up from 30 to 50 percent, which is very high in comparison to existent tax, which ranks from 1 to 25%.
However, if the tax is increased even a bit, like 5 percent, it will harm the industry severely. He gave the assurance that he would take up this issue in the meeting of the standing committee. He was hopeful that the Government would not increase the taxes on the Ship-breaking industry, as the existing tax was minimised in the last budget, which no doubt helped the industry to flourish, and considering that fact some 100 ships have been done with breaking in that period, which is a record.
The present boom at the Gadani ship-breaking yard began early this year after customs duty and the sales tax was waived in the last budget, and helped revive the ship-breaking industry after a lull of over 10 years. It has also generated economic activity in a big way and created employment opportunities from the seashores of Balochistan up to the North, where most of the foundries and re-rolling mills are located.
"If the proposed tax be imposed, some 10,000 to 12000 labourers will be displaced, and in the current volatile conditions of Balochistan, it is sheer nonsense to eliminate such a viable industry," said Sardar Shaukat Chairman Balochistan Business Economic Forum, while talking to newsmen. He further said that fearing such an imposition of tax, ships have been shored before June 30 to avoid its effects. While last year, it paid Rs 129 million in terms of tax.
He lamented taking this sector into the section of widening the 'tax net', as it is not feasible to tax already feeble sectors such as the ship-breaking industry. He suggested that the government pay heed to developing the infrastructure at Gadani, which would really help establish processing units there and be vital in boosting the economy of the country.