Million of rupees of imported electric power generators have been stuck up with the customs authorities due to discriminatory policy pursued by the revenue department of the Federal Board of Revenue (FBR) against generator importers of Sindh.
Generator importers of Sindh are subjected to discriminatory attitude and the authorities collect 10 percent duty on import of 5 KV- 650 KV generators of domestic and commercial use, while in Punjab Dry Ports charge only 5percent on same category of generators.
After great hue and cry by the Pakistan Machinery Merchant Group (PMMG), the authorities allowed clearance of imported generators on payment of five percent duty and by depositing remaining five percent of the duty as security in the shape of demand draft, till the issue is decided.
This has created serious financial crouch for Sindh based generator importers, as they are facing tuff competition with the importers of Punjab and from elements involved in selling of generator imported under Afghan trade available at very low cost in Sindh market.
The Sindh based importers of generators are subjected to discriminatory attitude since last three years, as the authorities failed to provide them the relief in the head of SRO 575(1) 2006 R -23 on gasoline, gas and diesel electric generators, not manufactured locally.
The issue remained unresolved since last three years, despite change in the government and there is still no relief has been provided to the importers of Sindh.
Talking to Business Recorder, the President, PMMG, Khurram Saigal said that the matter was brought to the notice of the Advisor to Prime Minister on Finance, Shaukat Tarin to direct the concerned authorities to provide relief to the importers of Sindh, but the issue is still lingering on. He said that the Sindh importers have lost the competitive edge as compared to their counterparts in other parts of the country, as far as the prices of imported generators is concerned.
Higher prices of imported machinery had a negative impact on the buying capacity of consumers. Further, he said that the Karachi Custom Authority acknowledges gasoline, gas and diesel generators as machinery and allow benefit of zero percent Sales Tax in terms of SRO 549(1) 2008 dated June 15,2008. Yet, it denies the benefit under SRO 575(1) 2006 of June 6, 2006 to reduce custom duty at the rate of five percent and zero percent ST, under amounting to arbitrarily whimsical application of law, being regularly allowed by the collectorate of Punjab and other parts of the country.
Further, he said that the government issued the aforesaid SRO for providing relief in the customs duty and ST on the import of generators not manufactured locally, which are normally used in numerous cottage industries, agriculture sector, construction and micro business, besides their large scale domestic utilisation.
Saigal also said that despite the unending cycle of load shedding in Karachi and interior of Sindh, sharp decline was observed in the wholesale and retail market during the last couple of months, creating severe financial hardship for a number of overwhelming traders and wholesalers.