Pkrevenue.com

Category: Trade & Industry

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

  • KCCI demands terminal operators to publicize container charges

    KCCI demands terminal operators to publicize container charges

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has demanded the terminal operators to make public the container charges.

    Agha Shahab Ahmed Khan, President, KCCI while referring to numerous complaints submitted at the Chamber by the importers, urged the Terminal Operators and Shipping Agents to publicize Full Container Load (FCL) and Less Than Container Load (LCL) charges on their websites in order to facilitate trade and industry.

    It has been observed that terminal operators and shipping agents do not share the breakup of charges even on demand and seek aggregate amount decided whimsically which was highly unfair as the relevant traders are totally unaware of what exactly was being charged under what label.

    “Access to such information is the fundamental right and a fair demand of the importers who are carrying out legitimate businesses and timely paying all their taxes”, he said, adding that the Ministry of Maritime Affairs must look into this issue and order the Terminal Operators and Shipping Agents to share breakup of charges with importers which would certainly be appreciated by the business community.

    Agha Shahab was of the opinion that Pakistan’s sea port charges were one of the highest in the South Asian region which discourage cost efficient shipping lines from taking cargo to and from Pakistan resulting in a demand/supply gap and higher transportation costs for the traders.

    “As per studies conducted earlier, Karachi’s two ports have charges which are estimated to be three times that of Sri Lanka’s, and seven times that of Singapore. Such problems should be addressed at the earliest, if we want to see Pakistan rapidly become a hub of regional trade”, he added.

    He said that the business community faces inconsistency in the charges of shipping companies, thus making costing and forecasting difficult for businessmen.

    Shipping lines are charging exorbitant charges in the name of free competitive rates and loose cargo landing delivery orders.

    “In addition, high port charges are being charged as there is no fixed policy in this regard. This is adversely affecting the business in terms of flow thus creating a negative impact for the business community,” he added.

    He stressed that the charges of KICT, PICT and QICT are too high in comparison with global standards and need to be reduced.

    “There is a need to increase the time of free days of delivery order and detention charges of containers to 21 days and detention slab of not more than $5 per day after 21 days by the shipping companies. The number of demurrage free days should also be increased to around 10 days,” he added.

  • Law allows fuel adjustment charges only for two months

    Law allows fuel adjustment charges only for two months

    KARACHI: Industry has raised questions over decision by National Electric Power Regulatory Authority (NEPRA) to allow past four years fuel adjustment charges to K-Electric.

    In a joint statement the leaders of North Karachi Association of Trade & Industry (NKATI) on Wednesday said that according to the law the distribution company not allowed to collect fuel adjustment charges for more than two months, but on the contrary, NEPRA has allowed to K-Electric for collecting four-year fuel adjustment charges which is a gross violation of the law.

    They said that NEPRA’s move is a conspiracy against businesses as the products that was exported four years ago can how cover the cost of fuel adjustment now.

    According to NEPRA’s notification, the amount will be charged from January 2020 to September 2020 in electricity bills.

    Capt. A Moiz Khan, patron in chief, NKATI and Nasim Akhtar, president, has strongly opposed the NEPRA to receive 4-year fuel adjustment charges from industries and refused to accept this decision.

    In an appeal to Arif Alvi, President of Pakistan, Imran Khan, Prime Minister, Power Minister and Chairman NEPRA, said that the permission to collect fuel adjustment charges to K Electric for the period from July 2016 to June 2019 should be canceled immediately or else industries will be destroyed.

    Capt. Moiz Khan and Naseem Akhtar said that business community of Karachi are already badly affected due to high doing business cost, while electricity tariffs have also been raised, huge taxes and in the current economic situation it extremely difficult to run industries, as industrial wheel is almost jammed due to over-production costs, especially the SME sector will be ruined and even the remnants of exports will be completely closed.

    They expressed concern that due to of such measures, industries will be defaulted and Government will be responsible.

    Nkati’s leaders urged to President and Prime Minister to immediately cancel K Electric’s permission to collect 4-year fuel adjustment charges and measures should be taken to protect industries from destruction, otherwise the industries will be locked up, which will lead to unemployment and worsening financial crisis. It will also have a very negative impact on exports so such decisions should be avoided.

  • Gas shortage created purposely for using RLNG: KCCI

    Gas shortage created purposely for using RLNG: KCCI

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has said that the gas shortage in Sindh is created purposely to force industry to take RLNG.

    Agha Shahab Ahmed Khan, President KCCI in a statement on Wednesday said: “gas pressure has been reducing purposely to pressurize the industries to take RLNG, which has resulted in terribly affecting the overall production and was causing severe losses of up to billions of rupees.”

    He added: “Gas resources in Sindh are largely being mismanaged that has led to creating severe crises not only in Sindh but also in Punjab and the rest of the country.

    “None of the provinces were getting the required gas due to the said mismanagement. If gas resources are distributed exactly as per Article 158, there will not be any crises in Sindh and Karachi, which is the hub of economic & industrial activities while the rest of the country must get RLNG which has to be promptly imported.”

    He expressed displeasure over serious gas shortage being suffered by the industries situated in all industrial zones in Karachi, stressed that the gas being produced in Sindh must at first be provided to its inhabitants and industries whereas only surplus gas should be forwarded to other provinces as per Article 158 of Pakistan’s Constitution.

    Agha Shahab stated that RLNG, which was being imported to overcome gas shortages, must be provided to those provinces who either have zero gas production or were not producing sufficient amount of gas as per their requirement whereas, the Sindh province, which is blessed with abundant gas resources, must get gas from its own reserves.

    “Why the consumers in Sindh are being compelled to take RLNG, when the province has sufficient gas reserves to surmount its local demand,” he asked, adding that it is totally ‘contrary to the Constitution.’

    “We, the business & industrial community of Karachi, are already suffering badly because of high cost of doing business therefore the suspension of gas in Karachi would not only prove detrimental for the industry but would also lead to worsening the economic crises, besides raising poverty and unemployment,” he opined.

    Referring to Prime Minister Imran Khan’s remarks in which the business community was urged to set up industries and factories as 2020 is going to be a year of growth, Agha Shahab said that under the prevailing circumstances when the existing industries were confronted with severe gas crises, high electricity rates, exorbitant interest rates, devaluing rupee against dollar, rising petroleum prices, lack of infrastructure and other serious civic issues, how could anyone think of setting up industries or go for expansion.

    “In order to actually make 2020 a year of growth, the government will have to resolve all these issues on top priority otherwise there will be no growth at all and the economic performance would continue to remain depressed or it may even worsen further,” he added.

  • KCCI assures support to newly elected FPCCI president, successful candidates of BMP

    KCCI assures support to newly elected FPCCI president, successful candidates of BMP

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has assured full support to newly elected president of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and successful candidates nominated by BMP panel.

    Chairman Businessmen Group (BMG) & Former President KCCI Siraj Kassam Teli has congratulated Chairman Businessmen Panel and the newly elected President FPCCI Mian Anjum Nisar, Senior Vice Chairman BMP Mian Zahid Hussain, Shaukat Ahmed, Zakaria Usman and others on BMP’s impressive victory in FPCCI’s elections.

    In a statement issued, Siraj Teli said that as BMP, under the leadership of Mian Anjum Nisar, has been struggling really hard since many years and this year they succeeded in overthrowing almost all their opponents, the business & industrial community hopes that the newly elected leadership at FPCCI would take practical steps to improve FPCCI’s functioning and make it a vibrant platform.

    Siraj Teli opined that setting the FPCCI free from the clutches of UBG, which remained in power for five consecutive years, was not an easy task but due to hard work and sincere efforts along with BMG’s full support, BMP candidates outshined in FPCCI’s elections and they all deserve to be appreciated.

    He was of the opinion that the new leadership at FPCCI will have to revisit all the policies, completely replace the existing mechanism and devise effective strategies in consultation with all stakeholders to improve FPCCI’s image and make it the leading voice of the entire business and industrial community at the national level.

    Siraj Teli stressed that FPCCI, as a national institution will have to focus on getting the national issues resolved while the newly elected leadership must fulfill their commitments made to the business community during the election campaign. “Every step taken by BMP leadership to improve FPCCI’s performance and in the larger interest of the country will be fully supported by the Karachi Chamber and Businessmen Group as we firmly believe that we all can play the lead role in dealing with the ongoing economic crises if we make collective efforts”, he added.

  • Export commitments to be missed on gas supply curtailment: APTMA

    Export commitments to be missed on gas supply curtailment: APTMA

    KARACHI: All Pakistan Textile Mills Association (APTMA) in a statement on Thursday said that industries will fail to meet export commitments due to 50 percent reduction in gas supply.

    Zahid Mazhar, Chairman, APTMA, Sindh-Baluchistan Region demanded the government to restore full supply of gas to the industries located in the province of Sindh and Balochistan as the industries in these province can’t operate and fulfill their export commitments at 50 percent load supply.

    Mazhar said that the province of Sindh and Balochistan are producing about 84 percent of the system gas and consuming only 39 percent of the gas produced in the country, even then the industries of Sindh province are denied of their Constitutional Right guaranteed by the Constitution of Pakistan.

    He said that the gas being produced in Sindh should first be supplied to the province and only after fulfilling the requirement of Sindh and Balochistan, surplus gas should be passed on to the other provinces in line with Article 158 of the Constitution of Pakistan.

    Mazhar further said that the textile industry units located in the province of Sindh are mostly export oriented units and these units attract priority in the allocation of energy including gas supply.

    As this is the peak season and any disturbance or short supply of gas would affect the timely shipments of export commitments resulting in not only decline in export earnings and loss of foreign buyers of textile products of Pakistan but would also result in decline in production and revenue of the government.

    He said that the curtailment in gas supply by 50 percent in addition to low gas pressure has completely disturbed the production-lines, resulting in decline exports and causing damages to industry’s costly plants and equipments.

    He further said that curtailment in gas supply is against the assurance given by the present government of Imran Khan of continuous and uninterrupted supply of energy both gas and electricity specially to the export oriented industry like textiles which is earning more than sixty percent of the much needed foreign exchange through exports.

    It is also against the government policy of industrialization and export led growth, he added.

    He said that the curtailment in gas supply by 50 percent to the Sindh and Balochistan based industry that makes about 52 percent of the country’s total exports is resulting in loss of foreign exchange and revenue.

    He said production of export oriented industries has shrunk since the export sector has been compelled to work for 50 percent of its capacity.

    In other countries governments give priority to their export oriented industry in supply of gas and energy, whereas domestic and commercial sectors are provided with LPG or LNG. On the contrary in Pakistan, our precious natural gas is being supplied to domestic and commercial sectors at the cost of industries.

    Mazhar urged the Federal and Provincial Governments and the gas utility to look into this issue on urgent basis and to ensure continuous and uninterrupted gas supply otherwise the industries would be compelled to close their operations which will create not only irreparable losses to the economy of Pakistan but would also create law & order situation due to unemployment of large number of workers employed in these industries.

  • Corporate RTO Chief urges business community to play role for tax policy improvement

    Corporate RTO Chief urges business community to play role for tax policy improvement

    KARACHI: Dr. Aftab Imam, Chief Commissioner, Corporate Regional Tax Office (CRTO) Karachi has urged business community to play their role in improvement of tax policy and procedures.

    (more…)
  • 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.