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ISLAMABAD: The large steel producers have opposed move by the Customs authorities of the Federal Board of Revenue for grant of permission to the importers of scrap for mutilation of goods/items, after filing of Goods Declaration (GD).

In this connection, different industries and sectors have approached Wajid Ali, secretary (Law and Procedure) FBR, strongly contesting the said amendments in the Rule 593 of SRO 250(I)/2011.

In this regard, the FBR issued notification of SRO 315(I)/2021 for information on the FBR website on March 18th.

Strongly rejecting this amendment, the large steel producers, have stated in their letter addressed to the concerned officials of the FBR, that it is very strange and how it is possible for any importer/clearing agent to request for mutilation of goods/item after filing of Goods Declaration.

They rejected the Customs proposed amendment allowing mutilation of brand new steel at ports for declaring it as scrap.

As per Pakistan Custom Act 1969, after filing of the Goods Declaration, all declaration is finalised that is description of goods, duty structure, value of the goods etc.

If the goods/items not found as per goods declaration then it is clear cut case of mis-declaration/contravention and case must be referred to Collector Adjudication for further proceeding.

The Pakistan Association of Large Steel Producers (PALSP) has repeatedly registered strong protest against misuse of this SRO by importers of steel scrap.

The Association has been requesting the FBR to disallow mutilation of the scrap at the ports.

However, for the reasons best known to the Customs Authorities, they have opted to allow mutilation after filing of the GDs.

It is believed that the move favors powerful importers, and PALSP said elements that are misusing Customs rules, are trying to misguide the Customs authorities of the FBR.

The importers save huge amount of government taxes/duties by importing brand new steel, later mutilating it at the port, and then by getting it declared as scrap.

The PALSP that represents Pakistan’s documented steel sector has strongly opposed the move and have requested the FBR to refrain from amending the rule 593 of SRO 250(I) 2011 as per draft amendment.

During the last seven years, a large quantity of brand-new steel to the tune of one million tons per year is being allowed to be imported in the garb of scrap that is resulting in loss of billions of rupees to the national exchequer.

This practice is creating unfair competition between the documented sector that pays duties and taxes ethically and those who evade taxes by misusing lacunas in the Customs rules as well as Import Policy Order.

Copyright Business Recorder, 2021

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