ISLAMABAD: The government is likely to waive penalty of millions of rupees on imported goods to be cleared by June...
ISLAMABAD: The government is likely to waive penalty of millions of rupees on imported goods to be cleared by June 30, 2020, well informed sources in Federal Board of Revenue (FBR) told Business Recorder.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its letters on April 14, 2020 and May 30, 2020 has stated that economic activities are severely disrupted by the outbreak of Covid-19 pandemic and its resulting lockdown. The economic impact has been extremely adverse as government has closed down whole business and commercial sectors to control the spread of Covid-19, putting a massive crimp on all commercial, economic and trading activities for the months to come. In the prevailing circumstances, importers are also unable to ex-bond their consignments within the time period stipulated in section 98 of the Customs Act, 1969. The warehousing period as prescribed in section is six months and all overstayed consignments attract penal surcharge on clearance @ 1 per month on duty/taxes involved.
Accordingly, FPCCI has requested the Federal Board of Revenue to consider grant of waiver of penal surcharge on overstayed consignments till June 30, 2020 in order to alleviate the problems of the importers due to fluctuation of exchange rate and other unprecedented restrictions on a range of business and economic activities triggered by Covid-19 pandemic. Similar requests regarding waiver of penal surcharge on overstayed goods have also been received from M/s Pakistan Coating Association and other individual importers such as M/s Web Convertors (Pvt)Ltd, M/s Z&J Hygienic Products (Pvt) Ltd, and M/s Grandeur Metals (Pvt) Ltd.
The Federal Board of Revenue has examined the matter, saying that due to fluctuation in exchange rate, coupled with other negative economic factors, the importers seem indecisive to clear the bonded goods within the statutory time limit. The data analysis shows that consignments approximately worth Rs6.822 billion involving duty and taxes of Rs4.354 billion are overstayed in bonds involving penal surcharge to the tune of approximately Rs630 million. Therefore, overstayed bonded goods on clearance would inflict additional financial burden on the importers in the shape of penal surcharge over and above the leviable duty and taxes.
FBR maintains that the federal government in similar circumstances in the past granted waiver of penal surcharge. The government may, therefore, in the prevailing situation favourably consider the waiver of penal surcharges in respect of the overstayed goods. For this to materialize, the federal government, under section 98(2) of the Customs Act, 1969, is empowered to remit the whole or part of the surcharge in case of any goods or category of goods subject to such conditions or restrictions as it may deem fit to impose, through gazette notification.
The Federal Board of Revenue, accordingly, has proposed to the cabinet: (i) warehousing period in respect of goods already warehoused may be extended up to June 30, 2020; and (ii) the penal surcharge leviable on these goods may be remitted only in respect of the goods which are cleared from the warehouses within the period from the date of issuance of the notification to June 30, 2020.
Copyright Business Recorder, 2020