They termed the said increase will bring price increase of essential goods besides encourage the smuggling of the products. “The importers are reluctant to clear their imported consignments from ports due to sudden higher assessment of goods”, they added.
Senior Vice Chairman of APMSPIDA, Khurram Riaz was of the view that the Association had received a list of 96 items as criteria for revised assessment of the imported goods which include Serial No 58, 80, 85, and 86 belonging to motorcycle spare parts.
He said motorcycle parts fall under PCT 8714.1020. The tax regime on H.S. code 8714.1020 is total worked as 100 percent of customs value (i.e. CD including add, duty plus 50 percent, Sales Tax 17 percent, additional sales tax 3 percent, income tax 5.5 percent, plus 8 to 9 percent overhead expenses). This is the highest tax rate and in result it attracts smugglers as compared to all other items of Pakistan customs tariff.
He pointed out that major portion of metal parts manufactured from CRC (mainly secondary quality) metal sheet which is used as raw material for parts and lighting equipment contain some glass material and both the materials are not more than 450 dollars to 550 dollars per M/ton range and after adding manufacturing cost which is not more than 25 to 30 percent; if finally worked out as 725 dollars per M/ton for finished product. The assessment criteria were 1.10 dollar per kg which was also enhanced to 1.20 dollar during last year.
“Around 80 percent of motorcycle spare parts is routed on legal way through Federal Board of Revenue (FBR) channel in which government earns a revenue of approximately two billion rupees yearly. Rest 20 percent trade which contain carburetors, CDI unit, crank case and break hubs, etc., which are being assessed 4.50 dollars, 3.00 dollars, 3.73 dollars and 2.33 dollars per kg (as per valuation ruling) and are not on the legal import channels due to their higher valuation rates which are almost double of the automobile (4wheel parts)”, Riaz added.
Khurram Riaz expressed fear if the present assessment criteria will be enhanced, most of the items will shift through illegal channels. This will not be the good sign for economy resulting in a heavy loss to government revenue in future.
He further pointed out that due to the sudden increase in assessment without taking the stakeholders into confidence; the importers are facing heavy loss in terms of demurrage, detention and loss of sale.
“Major importers have stopped their shipments which will result not only panic in the market, but also will result major shortfall in government revenue.
Meanwhile, Chairman Pakistan Chemical and Dyers Merchant Association (PCDMA), Shaukat Riaz has also rejected the customs new clearance guidelines of imported goods and demanded valuation on imported goods on price certification.
He said that the imports were reluctant to clear their imported consignment from ports due to fixing valuation and at exorbitant higher rate.
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