The Ministries of Commerce and Industries have blocked the recommendations of the anomalies committee with the argument that their suggestions were ignored without reason, official sources told Business Recorder.
The anomalies committee, headed by Advisor to Prime Minister on Finance, Shaukat Tarin, had recommended revision of duty on viscose yarn, cryogenic tanks, glassware, pigment thickener and tropical MPs. Sources said that when the Revenue Division presented proposals before the ECC in its meeting on January 27, 2008, Commerce Ministry, commenting on the recommendations of the anomalies committee, said that in the prevalent international trade scenario and WTO regime, levying or reduction in regulatory duty (RD) on different items would further damage Pakistan''s local industry, and it should be avoided.
Similarly, Industries Secretary argued that on the issue of stainless steel, the ministry was not taken on board and its dissenting views were not reflected in the proposals, sources added.
After discussion, a consensus opinion emerged that all proposals should be comprehensively re-analysed and input and dissenting views of all stakeholders, including Ministries/Divisions and technical departments should be incorporated in the proposals for resubmission to the ECC.
However, one of the interesting facts was that the press release issued after clearance by the Advisor to Prime Minister on Finance had stated that the ECC had approved Federal Board of Revenue''s (FBR) tariff anomalies committee''s recommendations (incorporating Engineering Development Board inputs) for modification in duties on various chemical items like yarn, glassware, cryogenic tanks, concurrently approving changes/corrections in FBR''s various SROs warranting technical rephrasing/rewording.
The ECC further directed the FBR to incorporate views of other GoP stakeholders for finalising recommendations on certain items to be submitted for consideration in next meeting. ECC further directed the anomalies committee to review its recommendations on specific items, focusing on revision in duties.
According to details, after the federal budget 2008-09, an anomalies committee under the chairmanship of Finance Minister had been constituted with Secretaries of Commerce, Industries, Textile and Chairman FBR to deliberate on any tariff anomaly which may have occurred on the budgetary measures and to recommend remedies for such cases.
Sources said that the anomalies committee met on December 16, 2008 under the chairmanship of Shaukat Tarin whereas Secretary Commerce, Secretary Textile, Additional Secretary Industries and Chairman FBR deliberated on different cases sent by the private and public sectors.
According to sources, 32 cases/representations received from different quarters were submitted and deliberated upon by the committee which recognised cases of tariff anomaly as such. However, it recommended certain specific changes in rates of duty in five cases out of seven. Changes/corrections in SROs in six cases have been recommended whereas no action at this stage has been considered appropriate with regard to the rest 19 cases.
Based on the recommendations of the anomalies committee, FBR made following proposals for the ECC: (i) duty on viscose yarn 1 ply (PCT code 5403.3100) may be reduced from 7 to 5 percent; (ii) duty on cryogenic tanks (PCT code 7326.9090) may be reduced from 20 to 5 percent; (iii) regulatory duty at 25 percent may be levied on glassware (PCT code 70.13); (iv) regulatory duty at the rate of 10 percent may be slapped on pigment thickener (PCT code 3906.9030); (v) regulatory duty at the rate of 40 percent may be imposed on tropical MPs multi system unit 5 ton capacity and above (PCT code 8415.1030).
Changes/corrections in SROs were as follows: (i) in SRO 565(1)/2006 against serial number 59, in column (2), the description ''stearic acid'' will be changed with the description '' stearic acid/distilled fatty acid'' (DFA); (ii) in SRO 565(1)/2006, the words ''deep draw'' appearing against serial number 2(4) for air conditioners, 3(5) for deep freezer/chest cooler, 4(5) for refrigerator/visi-coolers and 5(3) for washing machines will be deleted; (iii) in SRO 656(1)/2006 in serial number 74(7), the word ''water'' will be deleted and for the word ''flake'' the word ''flaker'' will be replaced; (iv) in SRO 656(1)/2006, PCT code ''7409.1100'' for copper foil and PCT code ''4805.5000'' for filter paper and paperboard appearing against items number 9 and 3 under serial number 131 (transformer industry) will be replaced with PCT code ''7410.1100'' and ''4805.4000'', respectively; and (v) in SRO 565(1)/2006, the description ''solvent C-9'' appearing against item number 1 and 2, against serial number 36 (pigments and dyes stuff) will be replaced with the description ''hydrocarbon solvent''.