Islamabad: The Federal Government has waived off Rs 1.6 billion penal surcharge to some specific companies on the recommendations of Federal Board of Revenue (FBR), well informed sources told Business Recorder.
On September 14, 2021, Revenue Division apprised the Cabinet that the goods imported and stored in the bonded warehouses (duties & taxes were paid at the time of clearance from these bonded warehouses) could remain in such premises for a maximum period of six months as stipulated in Section 98 of the Customs Act, 1969.
The overstayed consignments beyond six months attract penal surcharge on clearance @ 1% per month on duties/taxes involved. At times importers were unable to ex-bond their consignments due to number of reasons including fluctuating exchange rates, recession in the market, financial constraints and most importantly the on-going Covid-19 pandemic. This had led to a situation where large quantities of warehoused goods had been accumulated and attracted penal surcharge whenever cleared. Moreover, substantial amount of revenue was stuck-up in. these consignments.
Overstayed goods: Waiver of penal surcharge not likely
Accordingly, various bodies including Lahore & Sheikhupura Chamber of Commerce & Industry had requested the Federal Board of Revenue, to consider grant of waiver of penal surcharge on overstayed consignments in bonded warehouses to alleviate the problems of the importers. Similar requests regarding waiver of penal surcharge on overstayed goods had also been received from the Pakistan Steel Linepipe Industry Association, Pakistan Pulp Paper & Board Mills Association Lahore, M/s Naimat Ullah Steel Works (Pvt) Lahore and M/s Flying Cement Company Limited Lahore.
The data analysis showed that consignments approximately worth Rs.9.6 billion involving duty and taxes of Rs.5.6 billion were overstayed in all the bonded warehouses, involving penal surcharge to the tune of approximately Rs. 1.6 billion. The sources said, the Federal Government in the past, in similar circumstances granted waiver of penal surcharge.
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FBR, in its summary, requested the Government that in the prevailing situation consider the waiver of penal surcharge 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 a gazette notification.
In view of the foregoing, Revenue Division proposed that:( a) warehousing period in respect of goods already warehoused may be extended up to September 30, 2021; and 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 September 30, 2021. After brief discussion, the Cabinet approved the proposal and waived off penal surcharge of Rs 1.6 billion of some specific companies.
Copyright Business Recorder, 2021