Chairman All Pakistan Dry Ports Association (APDPA) Muhammad Ishaq Butt expressed deep concern over levy of 17 percent Punjab Sales Tax by Punjab Revenue Authority by making amendments to second schedule of Punjab Sales on service act on Port operators including Dry Ports.
Talking to newsmen at Sialkot Dry Port on Tuesday he said this step will severally affect the volume of the business being carried out through Dry Ports. Due to levy of this tax the services of dry ports will become dearer and exporters of the respective regions will prefer to move their cargo to Karachi, he said. He explained that the diversion of business to Karachi will cause reduction in revenue in the form of duties and tax to Punjab while congestion at mother ports at Karachi will also be increased.
The Chairman APDPA inquired why services of dry ports be subjected to Sales Tax when five zero-rated exporting sectors like textile, leather, carpets, surgical and sports goods are exempted from Sales Tax. The Dry Ports are providing ancillary services to these five zero-rated sectors and Punjab Sales Tax on such services should not be levied, he added.
Ishaq Butt further stated that the role of up-country dry ports was not understood in truest sense and clarified that up-country dry ports were established to provide custom clearance facilities to the exporters and importers of the region at their doorstep to promote exports which are lifeline for the economy of the country. Since the inception the dry ports have played a vital role in the development of export culture in their respective regions resultantly exports multiplied over the years, he added. In addition, thousands of new commercial and industrial undertaking came into being to create thousands of new job opportunities, he said.
The Chairman ADPPA said up-country dry ports are non-profit organisations; first, they pay on behalf of exporters and importers of the region and later recover the same with some meagre service charges. Expressing his disappointment, he said instead of sponsoring such organisations by the government they are being penalised by levying such taxes. Chairman APDPA demanded immediate withdrawal of Punjab Sales Tax levied on services of Dry Ports.