ISLAMABAD: In a meeting chaired by Finance Minister Ishaq Dar, Economic Coordination Committee of the Federal Cabinet, which is the apex economic decision-making body, has extended a temporary suspension on duty free-import of gold.
The ECC extended the temporary suspension on import of gold under SRO 760 till March 20, 2014. The Finance Minister directed Commerce Secretary, Federal Board of Revenue and State Bank of Pakistan to hold a meeting with all the stakeholders and bring proposals and recommendations to ensure export of gold jewellery to the extent of the gold imported for value addition.
Government agencies could not devise a foolproof mechanism to stop its smuggling to India. Separately, the ECC did not take a decision on the award of contract for setting up a fast-track liquefied natural gas (LNG) services terminal at Port Qasim, Karachi, probably for a good reason this time.
A temporary ban had been imposed on duty-free import of gold in July last year aimed at devising a mechanism to curb smuggling. After India slapped 8% duties to discourage gold import, the buyers had turned focus to Pakistan where the precious metal was being imported duty-free since 2001.
For encouraging export of gold products, the government had allowed duty-free import of gold under the ‘Entrustment’ and ‘Self Consignment’ schemes of 2001. However, since July, government agencies could not devise a safe mechanism, leaving no option for the ECC but to extend the ban.
Gold smuggling to India was eating up foreign currency reserves that dropped to the lowest level in years. The ECC was told that the reserves stood at $ 8.6 billion on February 24 including those held by commercial banks.