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Category: Trade & Industry

This section covers news on trade and industry. Pakistan Revenue is committed to providing the latest updates on business trends.

  • Border markets, warehouses to be established to contain smuggling: Member Customs

    Border markets, warehouses to be established to contain smuggling: Member Customs

    KARACHI: Pakistan Customs to set up border markets and border warehouses all border crossing of the country to contain smuggling, a top official of Pakistan Customs said.

    A statement released by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday quoted Jawwad Agha, Member Customs (Operations) as saying that on the instructions of the Prime Minister Imran Khan is being prepared under which border markets and border warehouse would be established at all border crossing of the country to contain the smuggling.

    Jawwad Agha in response to the FPCCI president suggestion regarding restoration of 20 days period for clearance of imported or exported goods from 15 days said that the period was reduced to 15 days due to avoid port terminal congestion.

    However, in case of default particularly for the LCL he agreed to consider downward revision of heavy penalty which at present Rs. 5000/- per day. Regarding reduction in utilization period from 24 monthsof input acquired for manufacture and export of output goods under DTRE, he informed that the time was reduced to boost the manufacturing and exports of goods and advised the importers to complete the cycle of manufacturing of goods within the stipulated time.

    In response to a suggestion for data exchange between Pakistani and Chinese customs agencies to curb under-invoicing, the Member Customs (Operations), FBR informed that during the Prime Minister’s visit to China the agreement has been signed and would be initiated soon.

    Engr. Daroo Khan Achakzai, FPCCI President in his recommendations said that in order to facilitate the exports, the government should introduce a new scheme for imports-cum-exports of packing material whereby a notified percentage of inputs may be allowed to be imported at zero rate duties against FOB value of exports of Previous year with flexibility to import any product among the notified list in any quantity within the overall entitlement of the exporter.

    Similarly Garment and Home Textile industry be facilitated by allowing duty free import of Accessories up to 10 percent of last year export performance, which should be added automatically in WeBOC of Manufacturer Cum Exporter ID after closing of 30th June every year on the basis of record available in WeBoc.

    Exporter should be allowed to use it in exports without the condition of mentioning these goods in Export goods declaration.

    However, if an Exporter is required to imports accessories/packing material in excess of 10% then he may use (SRO-492), (SRO 327-Export oriented unit) and (SRO 450-Manufacturing Bond). New Exporter may also use SRO 492(I)/2009 dated June 13, 2009 in first year to make their performance.

  • CCP imposes penalty of Rs75 million on flour mills association for anti-competitive activities

    CCP imposes penalty of Rs75 million on flour mills association for anti-competitive activities

    ISLAMABAD: The Competition Commission of Pakistan (CCP) has imposed a penalty of Rs75 million on Pakistan Flour Mills Association (PFMA) for providing a platform to share commercially sensitive information and fixing the quantities of production of wheat flour.

    The commission took the notice on reports suggesting unusual price hike of wheat flour or wheat atta across Pakistan and carried out raids on PFMA premises.

    “The enquiry in the matter concluded that PFMA is providing a platform to its members for settling of prices of wheat flour to avoid any form of competition which is in violation of the laws.”

    After hearing the parties, the CCP’s bench comprising of the Chairperson Ms. Vadiyya Khalil and Members Dr. Muhammad Saleem and Dr. Shahzad Ansar passed the order.

    The commission observed that under Article 38 of the Constitution the State is responsible to ensure the provisions of food and basic necessities at fair prices along with social and economic benefits to its citizens.

    Accordingly, Provincial Food Departments set a maximum cap of the wheat flour price under the Foodstuffs (Control) Act, 1958; as wheat is Pakistan’s dietary staple and used by consumers belonging to all socio-economic groups.

    The wheat flour currently contributes 72 percent of Pakistan’s daily caloric intake with per capita wheat consumption of around 124 kilograms per year, one of the highest in the world.

    The commission observed that having a maximum cap in the essential food item benefits the consumer to bargain for a lower price and prevents retailers from overcharging consumers. This also enables retailers to discount the product in order to increase their sale.

    “PFMA in complete derogation of the aforesaid objective, deliberately fixed the rates of wheat flour by conducting meetings and discussing the prices as well as the quantities to be produced and supplied by flour mills in violation of Section 4 of the Competition Act.”

    The CCP also observed that discussion, deliberation and decision regarding purely business concerns like current and future pricing, production and marketing are anti-competitive and should be avoided at all costs by the association.

  • Iranian delegation urges Pakistan for reducing customs duties for promoting formal trade

    Iranian delegation urges Pakistan for reducing customs duties for promoting formal trade

    KARACHI: Iranian trade delegation has urged Pakistani authorities to bring down customs duties in order to encourage formal trade between the two countries.

    Talking to the members of Karachi Chamber of Commerce and Industry (KCCI), Morad Nemati, leader of the Iranian delegation said that in order to improve the trade relations between Pakistan and Iran, it was really essential that steps have to be taken to deal with the barriers hindering smooth trade between the two brotherly countries while the high custom duties need to be brought down to encourage legal trade and discourage smuggling.

    Morad Nemati added that in addition to bringing down the high custom duties, formal banking channel between the two countries has to be activated which was widely being demanded by the business communities of the two countries since quite some time now.

    Commercial Attaché of the Iranian Consulate in Karachi Mahmoud Hajy Yousefi Pour, Vice President Shahid Ismail, Former Vice President Asif Sheikh Javaid, KCCI Managing Committee Members and members of the Iranian delegation from different sectors of the economy were also present on the occasion.

    While referring to China-Pakistan Economic Corridor (CPEC), Morad Nemati said that this essential project was going to open up huge opportunities not just for Pakistan but also for Iran and they (Iran) want to become part of this project which would surely ensure prosperity in the entire region.

    He also underscored that that the business communities of the two countries will have to meet more frequently and improve their contacts, besides holding Single Country Exhibitions which would certainly improve trade and investment in both the brotherly countries.

    Morad Nemati, who has also discharged his service as Commercial Attaché of the Iranian Consulate in Karachi, assured full support and cooperation to the business community so that trade could improve further and they collectively explore new avenues trade cooperation.

    Earlier, Vice President KCCI Shahid Ismail, while welcoming the Iranian delegation, stated that despite being brotherly countries, trade remains low hence, Pakistan and Iran must make collective efforts to explore new avenues. It has always been KCCI’s struggle to promote bilateral trade and the Chamber has a very positive approach towards improving trade ties particularly with neighboring countries.

    He pointed out that the bilateral trade between Pakistan and Iran was much less than the potential as Pakistan exports stood at a mere $330.2 million while the imports were around $1.247 billion during 2018.

    Shahid Ismail noted that the negotiations on Free Trade Agreement (FTA) are underway as both the countries have shared their desire of upgrading Preferential Trade Agreement (PTA) into Free Trade Agreement (FTA) for which initial drafts have already been shared while the State Bank of Pakistan has also shared draft of Memorandum of Understanding (MoU) for signing its Banking Paying Arrangement (BPA) with Iran’s Iranian Bank Markazi Jomhouri. Both countries have already signed MoU through which channels would be opened in the central banks of both the countries for trade transactions that would reduce the usage of dollar account for Letter of Credit (LC) clearance.

    He hoped that the desperately needed proper banking channel between Pakistan and Iran becomes a reality soon which would surely boost the existing trade ties.

    Shahid Ismail underscored the need to sort out infrastructural constraints to enhance bilateral trade via Quetta-Taftan land route whereas regular operation of ECO container train will lend impetus to cargo and transit facilities between the two countries. While underscoring the need for a realistic approach, Vice President KCCI said that KCCI was keen to strengthen trade ties with their counterparts in Iran.

  • Exporters perturb over part of tax refund claims disallowed without reason

    Exporters perturb over part of tax refund claims disallowed without reason

    KARACHI: Pakistan Hosiery Manufacturers Association (PHMA) on Friday pointed out reduction in refund amount against original claim.

    The PHMA in a letter sent to Ms. Seema Shakil, Member Inland Revenue (Operations), Federal Board Revenue (FBR), informed that it is regretfully informed that against the 100 percent claimed sales tax refunds amount, FBR has cleared 60 percent to 80 percent of 100 percent refund amount and the exporters are unaware why the FBR had withhold the remaining refund amount which has created unrest and spread dissatisfaction among our member exporters.

    With utmost concern we want to learn as to why 100 percent payment of Sales Tax Refund is not made and why some part payment has been deferred / withheld without informing any reason.

    Kindly look into this matter and inform us how to check the reason of withhold amount against sales tax refund claims in Annexure H under FASTER.

    Upon review of the outcome of the refund claims and feedback of our individual members through their professional team we have observed that rejection of the refund claim is largely attributed to the objection of “Risky” and “No amount is admissible for refund”.

    These objections by and large are issuing to refund claimants having a substantial amount of carried forward in their sales tax return and RMS particularly in the month of Jun 2019 but not appearing in RPO of the Jun 2019. You may appreciate in the past electronically rejected claims were processed by local RTO and subsequently RPO’s were generated with lapse of considerable time by processing officer.

    The carry forward amount in those RPOs are though appearing in RMS but due to skip of sequence the same were not incorporated in subsequent months electronic claims and therefore the carry forward amount in electronically issued RPO of Jun 2019 is not tallied with sales tax return or carried forward amount available in RMS.

    You are therefore requested to kindly look into the matter and issue the necessary instructions for incorporating verified carried forward amount appearing in RMS into FASTER and reprocess such refund claims which were rejected due to this technical constraint.

    Objections namely “Risky” and “No amount is admissible for refund” are not understandable, since all the Purchases are made from registered supplier & exporters for export purposes. Why would system not refund a Single Penny.

    Some of the exporters in the first month i.e. July 2019 has opted to carry forward the excess input tax. According to the refund rules the annex ‘H’ is only requires to be filed by person claiming refund.

    The question arises if the annex ‘H’ is not filed by the person opted for carry forward in accordance with the refund rules, how could their carried forward amount be transferred into the brought forward value of next month in the absence of this figure in their RPO of July 2019?

    How it is possible that one month claim is approved by the FASTER and the very next month claim is rejected by the FASTER without giving any reason. Therefore, FASTER should be equipped to define the reason of rejection. “Risky” and “No amount is admissible for refund.

    It has been observed the FASTER system runs once a month due to which large number of claims are rejected. It is proposed that FASTER system should run preferably once a week to avoid rejection of large number of claims.

    The time limit of 120 days for filing of Annex ‘H’ in this background is also needs to be extended. It is proposed to extended time limit for at-least another 60days for submission of Annex ‘H’ for the months of July, 2019 and August, 2019, so that genuine amount of refund claims due to this shift of regime and technical problems should not be lapsed.

  • Kuwait ready to ease visa policy for Pakistani businessmen

    Kuwait ready to ease visa policy for Pakistani businessmen

    KARACHI: Salem Yousif Al-Hamdan, Consul General of Kuwait, has said that his government is ready to ease visa policy for Pakistani businessmen.

    In order further discuss and devise strategies for easing the issuance of business visas, the Kuwaiti Interior Ministry was ready to hold negotiations and in this regard, Pakistan’s Ministry of Interior had been approached quite some time ago but unfortunately they have not received any response from them so far, the Kuwaiti Consul General said at a meeting with office bearers of Karachi Chamber of Commerce and Industry (KCCI).

    A press release issued by the KCCI on Wednesday quoted the consul general as saying that around 120 communities were living in Kuwait which was the basic reason why Kuwait has to adopt stringent visa policy which was not just for Pakistanis but also for all the foreigners.

    “We want to ease issuance of business visa hence, negotiations must take place between the Interior Ministries of the two friendly countries as soon as possible,” he added.

    Kuwaiti Consul General pointed out that China Pakistan Economic Corridor (CPEC) was a very important project which would have a positive impact not only on Pakistan but the entire region.

    “To attract the interest of Kuwaiti business community and other investors from the Gulf, we asked the Government of Balochistan to organize a CPEC Conference in Karachi and we will make sure that this conference is attended not only by the Kuwaiti business community but also by other potential investors from the gulf region,” he said, adding that this conference would help in raising awareness about the significance of CPEC project and provide a perfect opportunity to highlight the immense CPEC-related investment opportunities in Pakistan.

    Salem Al-Hamdan further mentioned that Kuwait has signed many MoUs with different institutions from all provinces in Pakistan while work on some of these MoUs has already begun and the Kuwaiti Investment Authority was also intending to undertake numerous projects in Pakistan, particularly in Sindh province.

    Referring to an MoU signed between Kuwait Chamber and Karachi Chamber, he said that both chambers had excellent relations in the past but with the passage of time, some gap has developed as no interaction was taking place between the two institutions.

    “Hence, I decided to visit KCCI and will certainly be making efforts to restore communication between Kuwait and Karachi Chambers by playing the role of bridge between the two institutions,” he added.

    He said that Pakistan and Kuwait, being brotherly and friendly countries, have been enjoying very old and good relations as many commodities were smoothly being traded while Kuwaitis have very positive sentiments for Pakistanis.

    “The two countries have good trade ties and many Pakistanis have also been working really hard in different sectors of Kuwaiti economy which is a testimony that we both are true friends,” he added.

    Kuwaiti CG was of the opinion that Karachi city, being the financial, trading and industrial center of the Pakistan with two ports, can offer a lot of trade and investment opportunities to Kuwaiti business community but the business communities of both the brotherly countries will have to meet regularly, exchange trade delegations and explore more avenues of trade and investment cooperation.

    Earlier, president KCCI Agha Shahab Ahmed Khan, in his welcome address, stated that Karachi, which is the economic hub of Pakistan, offers profitable investment opportunities and added facilities for trade, investment and joint ventures to business and industrial community from Kuwait.

    Karachi city, which contributes more than 70 percent revenue to the national exchequer, is an attractive place for Kuwaiti businessmen, who can surely earn maximum profits by undertaking joint ventures with their Pakistani counterparts.

    Commenting on economic relations between Pakistan and Kuwait, he said that both countries share cordial and healthy bilateral relations based on cooperation in different economic spheres.

    “During 2018, Pakistan exported goods worth $172.69 million to Kuwait as against exports of $166.78 million in 2017, showing a growth of 3.54 percent while our imports from Kuwait witnessed a decline of 4.11 percent to $1.40 billion during 2018 as against imports of $1.46 billion in 2017.”

  • OICCI releases key findings of IPR survey 2019

    OICCI releases key findings of IPR survey 2019

    KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) released findings from its 2019 Intellectual Property Rights (IPR) Survey on Tuesday, which shed light on the evolving landscape of intellectual property protection in Pakistan.

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  • Exporters claim Rs62 billion fresh refunds stuck up despite FBR’s 72-hour clearance assurance

    Exporters claim Rs62 billion fresh refunds stuck up despite FBR’s 72-hour clearance assurance

    KARACHI: The new 72-hour sales tax refund clearance strategy of Federal Board of Revenue (FBR) has failed as another Rs62 billion refunds were stuck up since launch of the new systems, exporters said.

    Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum in a statement on Friday said that around Rs62 billion of textile exporters liquidity held up with the government under FASTER Refund System in last 4 months, after imposition of 17 percent Sales Tax on Exports.

    Before abolishing SRO 1125 – zero percent sales tax for five export oriented industries –the government committed that sales tax refund claims payments will be paid immediately after submission of GD like Bangladesh Model.

    Contrary to Bangladesh Refund Model, Govt. launched FASTER by which sales tax refunds to be paid within 72 hours electronically. New FASTER system has been failed and FBR processing claims manually and SBP paying refund on advice of FBR.

    He said that huge amount of exporters’ liquidity of billions of rupees in Sales Tax Refund, Custom Rebate, Withholding Tax, DDT and DLTL has been stuck up with the government causing great sufferings to the already burdened exporters who are now at a loss to understand how to make both ends meet and such an alarming situation will ruin the export business of the Value Added Textile Exporters.

    On the demand of exporters, the government has withdrawn Refund Bonds electronically but payments against refund bonds have not been paid yet to the exporters, he informed.

    FBR also claimed that Custom Rebates shall be paid electronically with Export Proceeds as a result of system automation, however, the plan has not been turned into reality but previous backlog of eight months have been increased to twelve months.

    He added that due to financial hardships, Value Added Textile SMEs are not taking new export orders.

    It is pertinent to note that meager increase in the exports of value added textile sector due to previous policies of Government before Budget 2019-20.

    The impact of the policies of current Budget 2019-20 will be arrived in 2020 calendar year. It is a great irony that FBR vide SRO 747(I)/2019 dated 9th July, 2019 has withdrawn the exemption of sales tax and federal excise duty on buying of locally procured input goods by Export Oriented Units under SRO327.

    This Scheme was introduced on the pattern of Export Processing Zone (EPZ) where there is no taxes on buying of locally procured input goods and no taxes on utilities.

    Industries registered in Export Oriented Units (EOU) are liable to export 80% of their annual production. FBR should withdraw amendment to omit the clause 10 sub-section (b) and (c) of the Export Oriented Units and Small and Medium Enterprises Rules, 2008 so that exporters operating under Export Oriented Units can procure input goods without taxes as this is the safest scheme and item-wise individual analysis card is submitted in WEBOC.

    He said that exporters have a gut feeling that FBR with its harsh policies is trying to destroy value added textile export sector which is the largest export sector and labour intensive.

    It is an alarming situation that new comers are not interested in the business of export sector due to harsh incumbent government policies. Our existing Export Industry gets spillover orders from the international buyers and is surviving due to economy of scale and efficiency in the production.

    He demanded that government should clear all pending refund payments of exporters forthwith and restore zero rating (0%) of sales tax – no payment no refund regime in the best interest of exports, economy, foreign exchange earnings, employment etc.

  • Inflation cannot be controlled through high policy rate: FPCCI

    Inflation cannot be controlled through high policy rate: FPCCI

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday said that inflation in Pakistan is cost push and it cannot be controlled through tight monetary policy stance.

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  • US companies reluctant to visit Pakistan: USDA counselor

    US companies reluctant to visit Pakistan: USDA counselor

    KARACHI: Rey Santella, Agricultural Counselor of United States Department of Agriculture (USDA) has said although they were inviting the US business community but many of them were still reluctant to visit Pakistan mainly due to negative perception and also because of legal and Information Technology related hurdles that need to be addressed.

    While speaking at a meeting during his visit to the Karachi Chamber of Commerce and Industry (KCCI), he said that Pakistan had many challenges in the past but the country has been progressing well and the situation was much better now.

    “Good opportunities for US investors exist in Pakistan where they can surely explore trade and investment opportunities in numerous sectors including the agriculture, dairy, food items and animal feeds etc.”

    Rey Santella pointed out that besides exporting meat, soybean and other agricultural products, non-fat dry milk worth US$50 million was also being sent to Pakistan annually.

    “There is a big potential for further expanding trade and investment ties between the two countries but the business communities will have to meet more frequently so that this potential could be realized.

    “Meanwhile, USDA, which is already cooperating in the agriculture sector, is ready to provide technical assistance and training of trainers in the dairy and animal husbandry that would lead to improving the productivity.”

    He sought KCCI’s assistance in identifying numerous trade opportunities so that these could accordingly be focused and disseminated amongst US companies with a view to improve the existing trade ties between the two countries.

    Rey Santella further informed that USDA will be participating in Gulfood Exhibition scheduled to be staged in Dubai in February 2020 where Pakistani companies can visit the stalls of numerous US companies to examine their products and services.

    Earlier, President KCCI Agha Shahab Ahmed Khan, in his welcome address, stated that it was really heartening to see many US companies were taking keen interest in Pakistani market hence, it was the right time to fully facilitate and encourage joint ventures between the business communities of the two countries in numerous sectors.

    He was of the opinion that there was a huge potential to enhance trade and investment cooperation between Pakistan and the United States, particularly in the agriculture, dairy, livestock, fisheries etc.

    “We must promote collaborations in all such sectors with huge trade and investment potential which would certainly prove favorable for both the nations”, he added while acknowledging the support and cooperation being extended by USDA.

    He mentioned that Pakistan, being the 4th largest producer of milk, produces around 54 billion liters of milk per annum hence, this was an area where the business communities of the two countries must look for joint ventures while the USDA must extend technical cooperation so that the dairy yield could be improved further.

    Agha Shahab further noted that as US has an advanced agricultural sector while Pakistan’s economy is also agri-based, it is very crucial to cooperate in this particular sector by focusing on exploring ways and means on how to transfer US technology to Pakistan’s agricultural sector, which was facing several issues including limited cultivatable land, water and fertilizer scarcities and also the energy crises.

    “US can provide assistance in enhancing the yield of cultivatable land and you can also share water conservation and energy saving techniques, besides providing good quality fertilizers at competitive prices to Pakistani farmers”, he added.

    He also underscored that instead of staying confined to just sending the same old traditional items only, the business community must look into the possibility of diversifying the exports by exploring new avenues and they must also effectively market their products and services in order to maximize share in the US markets.

  • FPCCI urges convention compliance for continuation of GSP Plus

    FPCCI urges convention compliance for continuation of GSP Plus

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the government to ensure compliance to international conventions for continuation of GSP Plus status granted by European Union (EU).

    In a statement issued on Saturday, Engr. Daroo Khan Achakzai, President, FPCCI urged the government to take all necessary measures in compliance of core international conventions pertaining to social compliance, including human rights, labor rights, environment and good governance which are pre requisite for the continuation of GSP Plus status to Pakistan.

    While highlighting the importance of GSP Plus, he stated that Pakistan is the major beneficiary of GSP Plus from EU which is the second largest trading partner of Pakistan after USA and has positive trade balance with the bloc.

    He stated that GSP Plus allows 20 percent of Pakistani exports to enter EU market at zero tariff and 70 percent at preferential rates and it was expected that Pakistan’s exports to the EU would increase by 20 percent or more during the next few years.

    EU GSP Plus granted in 2013 and since then our export has increased to US$ 7.9 billion from US$ 6.2 billion but this increase is only in textile and clothing while the exports of many products like carpet, pharmaceutical, iron & steel, edible fruit, oil seed, copper, plastic, sugar etc. has declined as compared to pre GSP Plus period, he lamented.

    Pakistan’s export to EU is mainly dominated by textiles and clothing which accounts 82 percent of total exports which is facing strict competition with Bangladesh and Sri Lanka.

    He underscored the need to diversify and value addition in Pakistan’s export including carpets, leather, furniture, plastics, sports goods and agriculture products to exploit the full potential of GSP Plus.

    The EU assessment report (2016) has also indicated that Pakistan’s export to EU is heavily relied on one product which indicates a risky situation for Pakistan, he added.

    The President FPCCI also appreciated the signing of the EU-Pakistan Strategic Engagement Plan (SEP) in June 2019 for the establishment of a Security Dialogue, expanding relations in the areas of connectivity, migration, mobility, climate change and energy, education and culture, and science and technology.

    He also underlined the need of enhancement of foreign investment in Pakistan from EU as Pakistan has improved its ease of doing business and has brought several reforms in business.