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Author: Mrs. Anjum Shahnawaz

  • US approaches WTO against India’s additional duty measures

    US approaches WTO against India’s additional duty measures

    ISLAMABAD: The United States has approached the World Trade Organization (WTO) for dispute consultations regarding additional duties imposed by India on various imported goods from the US.

    A statement issued by the WTO said that the US had requested WTO dispute consultations with India concerning additional duties applied by India on certain imports of US goods.

    The request was circulated to WTO members on July 04.

    The United States claims that the additional duties, which India imposed through a series of notifications issued between June 2018 and June 2019, are inconsistent with provisions of the WTO’s General Agreement on Tariffs and Trade (GATT 1994) by unfairly discriminating against US imports vis-à-vis those from other WTO members and by according less favourable treatment to US goods than that provided for in India’s schedule of concessions.

    The US authorities a day earlier submitted a request to the WTO for consultation with India with respect to India’s imposition of additional duties with respect to certain products originating in the United States.

    “India does not impose the additional duties measure on like products originating in the territory of any other WTO Member,” according to the US.

    India also appears to be applying rates of duty to US imports greater than the rates of duty set out in India’s schedule of concessions.

    The US submitted the legal instruments through which India imposes the additional duties measure include the following:

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 48/2018 – Customs, June 20, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 49/2018 – Customs, June 20, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 56/2018 – Customs, August 3, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 62/2018 – Customs, September 17, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 77/2018 – Customs, November 1, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 80/2018 – Customs, December 15, 2018;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 03/2019 – Customs, January 29, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 06/2019 – Customs, February 26, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 11/2019 – Customs, March 29, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 14/2019 – Customs, May 1, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 15/2019 – Customs, May 14, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 16/2019 – Customs, June 15, 2019;

    Government of India, Ministry of Finance, Department of Revenue, Notification No. 17/2019 – Customs, June 15, 2019;

    as well as any amendments, replacements, related measures or implementing measures.

    The additional duties measure appears to be inconsistent with: Article I:1 of the GATT 1994, because India fails to extend to products of the United States an advantage, favor, privilege or immunity granted by India with respect to customs duties and charges of any kind imposed on or in connection with the importation of products originating in the territory of other Members, and Article II:1(a) and (b) of the GATT 1994, because India accords less favorable treatment to products originating in the United States than that provided for in India’s schedule of concessions.

    The additional duties measure appears to nullify or impair the benefits accruing to the United States directly or indirectly under the GATT 1994.

  • Pakistan’s foreign exchange reserves increase to $14.443 billion

    Pakistan’s foreign exchange reserves increase to $14.443 billion

    KARACHI: The total foreign exchange reserves of Pakistan increased by $92 million to $14.443 billion by week ended June 28, 2019 as compared with $14.351 billion in the previous week, the State Bank of Pakistan (SBP) said on Thursday.

    The SBP said that during the week ending June 28, 2019, it received inflow of $500 million from Qatar as placement of funds. After taking into account outflows relating to external debt and other official payments, SBP reserves decreased by $9 million during the week, it added.

    The reserves held by commercial banks increased by $101 million to $7.17 billion as compared with $7.069 billion.

  • Karachi Chamber demands restoration of sales tax zero rating for export industries

    Karachi Chamber demands restoration of sales tax zero rating for export industries

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Thursday urged the government to restore sales tax zero-rating for export oriented industries as due to withdrawal of this scheme many industries have shut down their activities.

    KCCI President Junaid Esmail Makda in a statement expressed deep concerns over the worsening crises being faced by the industries across Pakistan after the withdrawal of zero-rated regime which has created a disastrous situation for the export-oriented industries and it was a matter of grave concerns that many industries, particularly the textile units and its allied industries have shut down their activities, rendering thousands of people completely jobless.

    He said that the industries have been compelled to pay to 17 to 20 percent sales tax after the withdrawal of zero rated regime, which has intensified the hardships for industrial units of all sizes as they face huge liquidity crisis and more importantly industry cannot borrow the loan from commercial banks at 14-15 percent interest rate which was not a feasible option.

    “If the situation is not timely addressed, we fear that the export-oriented industries will not be able to operate smoothly and they will die”, he added.

    Junaid Makda stressed that keeping in view the miseries being faced by the Industry, the government must reverse its decision to restore zero-rated regime for five export oriented industries while ample opportunity must also be provided to all the stakeholders to amicably settle this serious issue otherwise Pakistan exports, which comprise mostly of textile products, will go all the way down to zero.

    The poor performance of export-oriented industries was something which neither the government nor the business community could afford particularly at a time when Pakistan was struggling really hard to somehow maintain and improve its depleting foreign reserves.

  • Share market plunges despite IMF loan approval

    Share market plunges despite IMF loan approval

    KARACHI: The share market ended down on Thursday despite positive outcome of loan approval by IMF for Pakistan.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,570 points as against 34,897 points showing a decline of 326 points.

    Analysts at Arif Habib Limited said that ‘buy the rumor, sell the news’ proved true again today, when yesterday’s signing off of IMF loan Package to Pakistan led the index with positive 400 points earlier today, but soon the selling pressure kicked in and caused the index to plunge by -430 points by the end of session, closing the index with -326 points.

    Cement, Steel, Fertilizer contributed to declines, whereas key scrips in banking and Power sector remained positive.

    Similar to yesterday’s trading activity, Cement and Chemical Sectors led the volumes table with Cement ranking first (22 million) followed by Chemical (14 million). Among scrips, KEL topped the chart with 9M shares, followed by TRG (8 million).

    Sectors contributing to the performance include Cement (-73 points), E&P (-63 points), O&GMCs (-50 points), Fertilizer (-32 points) and Pharma (-30 points).

    Volumes declined from 130 million shares to 112 million shares (-14 percent DoD). Average traded value also declined by 9 percent to reach US$ 27.8 million as against US$ 30.5 million.

    Stocks that contributed significantly to the volumes include KEL, TRG, MLCF, LOTCHEM and UNITY, which formed 33 percent of total volumes.

    Stocks that contributed positively include HUBC (+22 points), HBL (+9 points), ENGRO (+5 points), IGIHL (+4 points) and INDU (+4 points). Stocks that contributed negatively include OGDC (-33 points), LUCK (-33 points), PPL (-24 points), PSO (-20 points) and SNGP (-19 points).

  • Rupee continues recovery against dollar on fourth consecutive trading sessions

    Rupee continues recovery against dollar on fourth consecutive trading sessions

    KARACHI: The Pak Rupee continued its recovery against dollar on Thursday amid approval of IMF loan program for Pakistan.

    PublishJuly 4, 2019 6:10 pm

    The rupee gained another Rs1.08 to end at Rs156.57 the dollar as compared with previous day’s closing of Rs157.65 interbank foreign exchange market.

    The rupee made gains for the fourth consecutive trading sessions after hitting all time low of Rs164.06 in interbank market on June 27, 2019.

    The foreign currency market was initiated in the range of Rs155.50 and Rs156.50. The market witnessed day high of Rs157.00 and low of Rs156.00 in interbank foreign exchange market.

    The exchange rate also witnessed rupee appreciation in open market. The buying and selling of dollar was recorded at Rs156.00/Rs157.00 from previous day’s closing of Rs156.50/Rs157.50.

  • Largest share offering: Hubco raises Rs7 billion through right shares

    Largest share offering: Hubco raises Rs7 billion through right shares

    KARACHI: The largest independent power producer of Pakistan, Hub Power Company Limited (HUBCO) has issued right shares and raised an amount of Rs7 billion from Pakistan Stock Exchange (PSX), a statement said on Thursday.

    The Right Share is priced at Rs50 per share and the company has issued 140 million shares, as decided by the Board of Directors of Hubco.

    Considering the size of the offering, the Right Issuance is viewed as one of the largest share offering in the history of PSX.

    The purpose of Rights Issuance is to raise funds which will be utilized to consolidate Hubco’s energy portfolio and increase its shareholding in China Power Hub Generation Company (CPHGC) from 26 percent to 47.5 percent”, said Khalid Mansoor, Chief Executive of Hubco. CPHGC is a joint venture between China Power International Holding Ltd (CPIH) and Hubco under which development, construction and operation of 2x660MW Imported Coal-Fired Power Plant is being funded by the two companies.

    Both the units of CPHGC have been synchronized with the National Grid and the Project is expected to start its commercial operations by August 2019. With the aim of “Fueling lives through Energy.”

    The Hub Power Company Limited currently produces over 1600 MW through its three plants located in Hub at Baluchistan, Narowal in Punjab and Mirpur in Azad Jammu & Kashmir, generating around 8 percent of the total power generation capacity in the country.

    The Company is the only power producer in Pakistan with four upcoming projects listed in the CPEC and currently under-construction namely imported coal-based China Power Hub Generation Company (Private) Limited (CPHGC) at Hub, Thar Energy Limited (TEL) and Thalnova Power Thar (Pvt.) Ltd. and Sindh Engro Coal Mining Company (SECMC) at Thar Block II. The power generation capacity of the Company will enhance to over 3580MW after completion of the aforementioned power projects.

  • FBR updates exchange rates for late payment by amnesty declarants

    FBR updates exchange rates for late payment by amnesty declarants

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday updated daily exchange rates at Rs158.13 to the dollar for payment of taxes under Asset Declaration Scheme 2019 for those persons, who filed their declarations but failed to pay by due date.

    The Asset Declaration Scheme 2019 was announced for around one month and it was expired on June 30, 2019. However, the government extended the date for three more days i.e. July 03, 2019 till the office working hours.

    The individuals/companies availed the amnesty scheme by due date were required to pay on the prescribed rates.

    The rate of taxes for undisclosed assets, sales or expenditures prescribed within due date as:

    01. All assets except domestic immovable properties: 4 percent

    02. Domestic immovable properties: 1.5 percent

    03. Foreign liquid assets not repatriated: 6 percent

    04. unexplained expenditure: 4 percent

    05. undisclosed sales: 2 percent

    However, the declarants have been allowed to make payment beyond the time limit of the scheme with additional default surcharge at the following rates:

    01. If the tax is paid after June 30, 2019 and on or before September 30, 2019: 10 percent of the tax amount

    02. If the tax is paid after September 30, 2019 and on or before December 31, 2019: 20 percent of the tax amount

    03. If the tax is paid after December 31, 2019 and on or before March 31, 2020: 30 percent of the tax amount

    04. If the tax is paid after March 31, 2020 and on or before June 2020: 40 percent of the tax amount.

    The FBR is issuing exchange rate for the facilitation of the persons avail and filed their declarations up to July 03, 2019 to make payment with default surcharge.

  • FBR to question source of foreign remittances above Rs5 million

    FBR to question source of foreign remittances above Rs5 million

    ISLAMABAD: Federal Board of Revenue (FBR) will question the sources for all those foreign remittances exceeding Rs5 million in a year, which are transferred through normal banking channels.

    The government has tightened the unexplained inflows by making amendment to Income Tax Ordinance, 2001 through Finance Act, 2019.

    In the past the inflows of foreign remittances were free from questioning by the tax authorities and recipient in Pakistan were allowed to get the amount into their bank accounts.

    However, through Finance Act, 2018 the limit was introduced to Rs10 million received as foreign remittances and no question would be asked to any amount of foreign exchange remitted from outside Pakistan through normal banking channels that is encashed into rupees by a scheduled bank and a certificate from such bank is produced to that effect.

    This limit has been further reduced to Rs5 million through Finance Act, 2019 and now from July 01, 2019 the inflows would be monitored and FBR has been authorized to ask a persons receiving above Rs5 million in a year about the source of sender of the amount from outside.

    The relaxation for no questioning was allowed since 2004 and it was grossly misused as it had provided legal channel for bringing back untaxed money into Pakistan without questioning by the authorities.

    For the past several years tax authorities as well as stakeholders appealed the government to abolish this permanent amnesty or put condition that the remittances without question should only be received by relatives of the sender.

  • IMF approves $6 billion loan for Pakistan

    IMF approves $6 billion loan for Pakistan

    ISLAMABAD: The International Monetary Fund (IMF) has approved a 39-month extended arrangement for Pakistan under which the country will get $6 billion to support the economic reform program, said a statement.

    After approval of the loan under Extended Fund Facility (EFF) by the Executive Board of IMF, Pakistan is now eligible to immediately receive first tranche of $1 billion, the IMF statement said.

    The fund will quarterly review the performance of Pakistan over 39 months.

    The EFF-supported program would help Pakistan to reduce economic vulnerabilities and generate sustainable and balanced growth.

    The statement added that the programme would focus on a decisive fiscal consolidation to reduce public debt and build resilience while expanding social spending.

    It will also try to ensure a flexible, market-determined exchange rate to restore competitiveness and rebuild official reserves besides eliminating quasi-fiscal losses in the energy sector, strengthening institutions and enhancing transparency.

    Meanwhile, Advisor to Prime Minister on Finance Dr Abdul Hafeez Shaikh said the IMF’s support bodes well for the country and is a testament to the government’s resolve for ensuring financial discipline and sound economic management.

    Welcoming the IMF approval of $6 billion loan for Pakistan, Hafeez Shaikh said in a tweet that structural reform agenda which includes improving public finances and reducing public debt through revenue reforms is key part of the program.

    “Our program supports broad based growth by reducing imbalances in the economy. Social spending has been strengthened to completely protect vulnerable segments”, the advisor added.

  • Finance Act 2019: SBP to assist Customs against illegal fund transfers

    Finance Act 2019: SBP to assist Customs against illegal fund transfers

    ISLAMABAD: State Bank of Pakistan (SBP) will assist customs authorities in prevention of illegal inward or outward transfers of funds.

    According to Finance Act, 2019 a new Section 32C has been inserted to Customs Act, 1969, which stated:

    “32C. Mis-declaration of value for illegal transfer of funds into or out of Pakistan.- (1) Without prejudice to any action that may be taken under this Act or any other law, for the time being in force, if any person overstates the value of imported goods or understates the value of exported goods or vice versa, or using other means including short-shipment, over-shipment, with a view to illegally transferring funds into or out of Pakistan, such person shall be served with a notice to show cause within a period of two years from the date of detection of such mis-declaration as to why penal action shall not be initiated:

    Provided that if goods have not been cleared from customs, such goods shall also be liable to be seized:

    Provided further that a team consisting of Additional Collector, duly assisted by an expert in the relevant field and an officer of State Bank of Pakistan (SBP) as specified, shall submit a report in writing with evidence for the Chief Collector. The said report shall also be furnished to the SBP for action, if any, under the law regulated by SBP.

    (2) Any proceedings under this section shall not be initiated without the explicit approval of the Board.”

    The Finance Act, 2019 also mentioned penalty for such offence:

    “Such person shall be liable to penalty not exceeding two hundred thousand rupees or three times the value of goods in respect of which such offence is committed whichever is greater; and such goods shall also be liable to confiscation; and upon conviction by a special judge he shall further be liable to imprisonment for a term not exceeding five years and to a fine which may extend upto one million rupees.”