The Sindh High Court directed Commerce Ministry, co-ordination authority for Pak-Afghan transit trade and Chairman of Federal Board of Revenue to file comments on measures to end smuggling allegedly being done under the garb of transit trade.
This order was passed on petition filed by two exporter companies--Dutech (Pvt) Limited and Falcon Abrasives (Pvt) Limited--which sought direction for government authorities to end smuggling, being carried out in the guise of Pak-Afghan transit trade.
They submitted that practice of cross-border smuggling between Pakistan and Afghan, and subsequent evasion of large chunks of taxes by importers and exporters, was causing great loss to national exchequer. This also badly affects domestic industry as issue of smuggling remains unsolved due to poor implementation of Pak-Afghan Transit Trade Agreement 1965.
In 2011, the government finalised and enforced Pak-Afghan Transit Trade Agreement 2010 to control cross-border smuggling, taxes evasion. Under the agreement, Customs duties were waived on importers and exporters. But, smuggling was continuing due to poor implementation of various provisions of newly enforced agreement between the two countries. Peshawar's 'Karkhano Market' is centre to sell and purchase smuggled items.
Their counsel, Waheed Haider, stated this during suo motu hearing by apex court into containers missing case report submitted by Federal Ombudsman made shocking disclosure. According to Ombudsman's report, 7922 containers containing goods went missing from January to October 2010. All were unloaded by traders of 'Karkhano Market', where stolen goods items are being sold openly. Some 71202 other containers went missing that were never recovered. According to report 55140 containers that left Karachi never reached border posts, while 27871 containers received at border post had no departure entry in record at Karachi. Counsel contended that officers in Customs, other relevant departments were involved in the practice and do not fully enforce agreement for their mala fide intentions. Resultantly, the agreement failed to yield encouraging results, and local industry is further facing pressure.
It also causes losses to national coffers. It was prayed to direct Commerce Ministry and Pak-Afghan Transit Trade Agreement Co-ordination Committee to take effective measures to curb smuggling by implementing agreement in letter and spirit. It was also requested to call entire record of trade done so far. After hearing arguments, SHC division bench directed Commerce Ministry, PATTA 2010 Co-ordination Authority & Chairman Federal Board of Revenue to file comments within two weeks. Hearing was adjourned to a date in office.