PHMA seeks end to ban on purchase of machinery

The Pakistan Hardware Merchants Association (PHMA) on Friday has demanded of the government to lift ban on purchase of machinery, as government was the buyer of 30 per cent of the total sale of machinery and spare-parts in the country.
In its budget proposals forwarded to the FBR, the Association said that owing to ongoing unprecedented energy crisis, the machinery and spare parts sales had already gone down by almost 40 percent, therefore the government should rescue this important sector of the economy as the total volume of the hardware is between 3 to 4 billion dollars.
The step motherly attitude of the government is not only depriving the government of much-needed revenue but also denting its efforts aimed at alleviating the poverty from the country. The hardware sector is one of the biggest sectors of the economy and covers constructional hardware, architectural hardware, agricultural hardware, house ware, white goods, industrial hardware, tools and power generation equipment while the number of people attached with this sector directly or indirectly runs into millions there due attention for its uplift would go a long way for the revival of the economic activities in the country.
It further said that the government should play its rose positively and immediately announce withdrawal of ban on purchase of machinery. If the government wants to make the upcoming budget document meaningful and result oriented, it would have to take practical measures like lifting ban on the purchase of machinery.
Under section 25 A, valuation procedure is wrong, as the Customs authorities rely on prevailing retail prices and on that basis fix the valuation of imported goods. We suggest that valuation prices be fixed with consent of association/chambers keeping into consideration time and quantity of purchase. According to section 25-A, valuation is to be kept valid 6 months whereas valuation is being used for indefinite period. Presently, appraisement is being done with different value of same goods at different ports at same time. Since Collectorates are working under a single customs regulation, so same value for appraisement should be used at all ports.
In the proposals, it was pointed out that during 2005; construction was given the status of industry. But, the rate of duty and taxes levied for items used in construction is very high like; customs duty 25 percent, sales tax 16 percent, income tax four percent Research and Development one percent. All such taxes increase the cost of goods to big extent, thus raising the cost of construction and this also encourage smuggling of goods used in construction and loss of revenue to the government.