Steel traders have urged the federal government for a mechanism to stop the misuses of SROs issued for import of steel. According to a letter written by All Iron Steel Merchants Association (AISMA) to minister finance, some Statutory Regulatory Order (SROs) in respect of custom duty have been issued for import of steel to facilitate to steel manufacturers.
Under these SROs, the manufacturers were given some concession in term of custom duty with the understanding that after the import of steel products like hot rolled, galvanized products and cold rolled, they will consume the entire material in their units for value addition.
However, unfortunately local manufacturers took advantages of various exemptions granted to them and importing more than their capacity. The excess imported raw material is being sold in the open market instead of consuming the entire imported material for value addition. Thus domestic manufactures are making windfall profit at the expense of billion of rupees loss to the national exchequer.
Hammad Poonawala president AISMA said that while issuing the SROs the competent authority was failed to evolve a mechanism to ensure that the material, which is being imported under SROs, will be 100 percent used for production and will not to be sold in the local markets.
He said that these SROs also contributed in the closure of Pakistan Steel Mills as it's sales declined adversely due to cheap import of steel under these concessions and finally closed down. He claimed that some industries are just on paper and practically do not exist, but importing steel products including HR, CR and galvanized products on concessionary rates resulted in billions of rupees loses for the last 10 years to national exchequer in term of taxes and duty.
Poonawala has urged the federal government for an investigation through National Accountability Bureau (NAB) preferably of all those industries who imported steel under these SROs in the last 10 years. Once the above exercise is under taken honesty, it will confirm that misuse of SRO 655/565 has resulted in billion of rupees loss to the FBR in term of custom duty, he added.
There is need to evolve a mechanism with consultation of all stakeholders to check the import of steel under these SROs and generate billions of rupees revenue for the national exchequer, he suggested.
Association has requested the Chief Justice Of Pakistan, the Prime Minster, the Finance Minister, the Director NAB, the Chairman FBR and others for investigation of imports under these SROs to stop misuses and discourage the illegal trading.