KARACHI: The charging of 17 percent sales tax on clearance of imported leather and textile goods likely to result in piling up of consignments at ports although Pakistan Customs is supposed to collect 17 percent sales tax imposed in budget 2014-15 from July 1.
According to details, the government in the new budget has increased sales tax on the import of finished articles of leather and textile from 4 percent to standard rate of 17 percent with effect from July 1, 2014. However, the customs department has started clearance of consignments carrying finished articles of leather and textile at standard rate of sales tax with the assurance that it will be adjusted additional sales tax next month. Apparently the move aims at meeting the customs annual budgetary target.
Importers have expressed strong resentment over charging of 17 percent sales tax on the import from current month and have refused to clear their consignment on excessive payment of 13 percent sales tax from June, which may cause congestion at ports.
Reports confirm that the customs department is forcing importers to pay 17 percent sales tax for the clearance of consignments falling under SRO 1125(I)/2011.
It said that the department is not legally authorize to charge the levy from the current month. Although the customs department has given assurance to importers to adjust the additional sales tax in July, importers were reluctant to get their consignments cleared in June. The importers refused to follow the budget decision from current month that would lead to congestion. Moreover, the decision will not only lead to severe dip in the imports of finished articles of leather and textile but also promote smuggling.
