Duty on smuggling-prone items may be slashed

The government is likely to reduce customs duty on major smuggling prone items under the tariff rationalisation policy to check smuggling under the Afghanistan Pakistan Transit Trade Agreement (APTTA). Sources told Business Recorder here on Friday that the issue came to light during an important meeting on the new Customs Rules under the APTTA held at the Ministry of Commerce.
The meeting discussed various issues relating to APTTA for giving a detailed briefing to the Cabinet on the new agreement. One of the proposals is to rationalise tariff on major smuggling prone items to discourage smuggling by reducing cost of the legitimate imports. The list of major smuggling prone items would be finalised by the FBR for tariff rationalisation, if appropriate. The FBR will examine current duty structure on the major smuggling prone items keeping in view volume of smuggling. The FBR has no authority to propose any tariff reduction in the Afghan Customs Tariff, but duty reduction is possible in case of smuggling prone items under the Pakistan Customs Tariff. However, the protection to the local industry would be ensured before taking any final decision in this regard.
Under SRO.566(I)/2006, the government had issued a list of highly smuggling-prone items under the Customs Act, 1969. The items are Gutka (all brands and origin), black tea, vegetable ghee/cooking oil, silk fabrics, televisions, soaps/shampoos telephone sets and bicycles etc dyes and chemicals, PVC/PMC material, black tea (except Op-pekoe), refrigerators, air conditioners, television, soaps/shampoos, polyester metalized films, ball bearing, natural silk, natural silk yarn, natural silk fabrics, vegetable ghee/cooking oil, television sets, DVD/VCD players, microwave ovens, bicycles, hot rolled plates of high harness ballistic protection, safety glass, wireless equipment of any kind, BOP films, raw material for cigarette manufacturing industry (filter road, tipping paper, cigarette paper and Acetate Tow), stainless steel sheets, circles and coils and tin plates and sheets.
The federal cabinet would be briefed on important issues of the APTTA including impact of new agreement on the trucking industry and border related areas and other issues.
The government of Pakistan will also introduce a major provision in the Customs Rules on the Afghanistan Pakistan Transit Trade Agreement (APTTA) to treat Afghan goods declaration (GD) as cross border certificate to ensure encashment of financial security only after confirmation of transit container by Afghan customs.
Sources said that the new Customs Rules under the APTTA were discussed threadbare during the meeting held here on Friday. The FBR has finalised the new Customs Rules which have been shared with the officials of Commerce Ministry. Under the proposal, all the existing customs orders, letters and procedures relating to the Afghan Transit Trade Agreement (ATTA) would be abolished after introducing new Customs Rules under the APTTA.
According to sources, the FBR has decided to end the concept of cross border certificate which is presently in practice to confirm whether a transit container has actually reached Afghanistan after the crossing border. Under the new procedure, the Afghan GD would be used as a cross border certificate for verifying that the transit container has actually reached Afghanistan. The duty of transit goods would be paid by the importers in Kabul or Jalalabad. Once the duty has been paid and Afghan GD has been verified, the same GD number would be mentioned on the Pakistani documents or GD. This would be treated as the cross border certificate to ensure that the transit goods have actually reached Afghanistan. The financial security collected against the transit containers would not be released by the Pakistani customs unless or until the Afghan GD has verified by Pakistani authorities.
Sources said that the existing practice of submission of cross border certificates would be consciously ended to check instances of corruption, if any. The confirmation of the Afghan GD would ensure that the goods have actually reached Afghanistan.