ISLAMABAD: Pakistan Customs has recommended the imposition of 10 percent import duty on commercial import of silicon steel to prevent the incidence of misdeclaration.
As per details, the import of silicon steel has witnessed a conservable increase over the past one year despite the fact that no new investment has been made in silicon-steel-consuming sector like electric transformer and fan industry.
Reportedly, a large quantity of Cold Rolled Coils (CRC) is being imported under the umbrella of silicon steel as there is zero duty on import of silicon. According to reports some commercial importers are involved in misdeclaration and importing huge quantity of CRC under the garb of silicon steel.
FBR has received a large number of complaints in this regard from domestic steel industry, which is demanding some duty on import of silicon steel to check the misdeclaration of CRC. On the other hand, the federal government has given 10 percent tariff protection to domestic CRC Steel manufacturers, which have invested some $200 million in steel sector over the last few years.
However, some of commercial importers/traders started to import CRC steel declaring its silicon steel to avoid paying 10 percent customs duty which resulted in loss of approximately Rs one billion annually to the national exchequer besides creating serious difficulties for the domestic CRC industry.
A look at customs data revealed that import of silicon steel jumped by 330 percent to a monthly average of more than 7,600 metric tonnes during January 2013 to February 2014 up from previous monthly average of 2,300 metric tons during 18 months period from July 2011 till December 2012. In this regard, the CRC Steel manufacturers have held a number of meetings with Ministry of Industries, Engineering Development Board, Federal Board of Revenue and Customs officials and finally Pakistan Customs (Karachi Enforcement) has recommended FBR to impose 10 percent duty on commercial import of silicon steel to stop misdeclaration and enhance revenue collection.
It is necessary for the authorities to ensure level playing field for CRC Steel manufacturers as well as stop government’s revenue pilferage and increase tax/duty collection.
It is to be noted that Pakistan has one of the lowest per capita annual steel consumptions in the region at 34 kg per head compared to 427 kg per head in China, 211 kg per head in Thailand, 130 kg per head in Brazil and 55 kg per head in India.
