Directorate General of Intelligence and Investigation Customs Federal Board of Revenue (FBR) has endorsed government decision to clamp temporary ban on import of gold, effectively discouraging smuggling of the precious metal through suspension of SRO266(1)/2001 from July 31, 2013.
Sources told Business Recorder here on Tuesday that the Directorate General of Intelligence and Investigation Customs is confident about massive decrease in smuggling of gold due to imposition of ban on the import of the commodity. The so-called legalised smuggling of gold would be end through the timely policy measure of the government during current month.
Sources added that the Directorate General of Intelligence and Investigation Customs is the prime anti-smuggling agency which fully supports this measure of the Economic Co-ordination Committee of the Cabinet. The legal smuggling of the gold taking place through special schemes for jewellery exporters has ended following suspension of operations of SRO266(1)/2001.
The ECC had imposed a 30-day ban on import of gold by suspending operation of SRO266(1)/2001 from July 31, 2013. Currently, there are special schemes in operation to facilitate jewellery exporters whereby they are able to import gold without payment of any duty on the condition that this gold is re-exported after converting it into value-added jewellery. These schemes governed by SRO 266(I)/2001, dated May 7, 2001 of Ministry of Commerce are referred to as the "Entrustment" and the "Self Consignment" schemes.
Recently, there were serious apprehensions that these schemes for duty-free import of gold are being misused by some unscrupulous elements and the national interest was put at stake. The duty-free gold is being smuggled to India. In recent months the import of gold into Pakistan, under these schemes has seen an enormous surge which is highly abnormal. During the period January to June, 2013, gold worth Rs 92.970 billion was imported compared to Rs 19.132 billion for the same period in 2012. This trend has become even more alarming in the first 26 days of July 2013. The import of gold under these schemes was to the tune of Rs 52.549 billion.
The government has taken cognisance of the apparent abuse of these schemes and decided to take immediate steps to prevent further damage to the national economy. It has been decided to impose a short-term temporary ban of 30 days on the duty-free import of gold under these special schemes. This ban is purely temporary and is intended to allow the government sufficient time to re-examine the operation of these schemes with a view to speedily remove loopholes and deficiencies. The objective of the government is to quickly restore the scheme in an improved form so that genuine exporters of gold jewellery are facilitated in the best possible way to contribute to the national objective of increasing exports.
The ECC decided that operation of SRO 266(1)/2001 dated May, 7 2001 may be suspended with effect from 31.7.2013 for a period of 30 days. The Ministry of Commerce would take administrative measures to implement this decision in letter and spirit.