Afghan, Nato/Isaf cargoes: Govt to impose transit fee

ISLAMABAD: The government is committed to imposing transit fee on Afghan commercial cargo, including Nato/Isaf containers, under the newly introduced provision of the Customs Act 1969.

Sources told Business Recorder here on Wednesday that initially the proposed transit fee may be 100 dollars per container which could be increased with the passage of time. Pakistani customs authorities have started collecting insurance guarantees on the Afghan transit consignments under the Afghanistan Pakistan Transit Trade Agreement (APTTA).

The Federal Board of Revenue (FBR) has also taken measures to expedite clearance of stuck up Afghan transit trade consignments at Karachi port. In this regard, a number of decisions have been implemented at the ports under the new transit trade agreement. The proposed transit fee would be imposed in a gradual manner to avoid any reaction from the Afghan side. However, the exact timeframe for imposition of the fee has yet to be decided by the Pakistani side.

Sources said that the FBR had introduced an enabling provision in the Customs Act 1969 to collect transit fee on Isaf/Nato containers for which rate of the fee and method of collection has yet to be finalised. The grant of transit facility has increased customs facilitation and allied operations manifold. In order to provide self-sustaining infrastructure and services at customs stations and en route, an enabling provision for collection of transit fee is being provided by adding a new section namely 129A in the Customs Act, 1969. According to the provisions of the section 129A of the Customs Act, a transit fee may be levied on any goods or class of goods in transit across Pakistan to a foreign territory at such rates as the Board may, by notification in the official Gazette, prescribe.

Giving details about the proposed transit fee, sources said that the government is legally empowered to impose transit fee in US dollars on containers destined for Afghanistan, as presently the FBR is not collecting any fee or charges from Afghan commercial cargoes or Nato/Isaf containers.

At present, the FBR is not collecting any money in the form of taxes or fees on the commercial Afghan transit containers under the transit trade agreement. Similarly, Pakistani customs authorities are also not receiving any transit fee from heavy Nato/Isaf containers destined for international forces operating in Afghanistan. Thus, no amount has been collected on allowing transit to Afghan containers via land route to Afghanistan.

Sources maintained that there is considerable damage caused to the roads and bridges due to constant movement of heavy Afghan and Nato/Isaf containers in transit. The volume of containers has increased manifold in recent years and to manage this volume use of Pakistan's infrastructure including computerised services, scanners, manpower and other equipment has increased. This is first of its kind of transit levy to be imposed on the Afghan transit trade containers to get some compensation for damage caused during movement of Afghan transit cargo under the transit trade agreement.

So far, the government has not exercised the powers of levying transit fee on these consignments under the transit trade agreement. The enabling provision was introduced in the Customs Act during June 2011, but the government has not exercised the powers to notify the fee as per section 129A of the Customs Act, 1969.

It is important to mention that Senate Standing Committee had endorsed FBR's decision to levy transit fee on transit containers.