SIALKOT: All Pakistan Dry Ports Association Chairman Muhammad Ishaq Butt has said that the up-country dry ports contributed a lot towards national exchequer and played pivotal role in development of exports but there is lethargy in resolution of their problems by departments concerned.
Addressing an important meeting of the exporters and importers held here, he said that besides clear instructions of President of Pakistan to form a joint committee of all the stakeholder to address the problems of dry ports, the joint committee has not yet been formed. He added that exporters were not using up-country dry ports due to considerable delay in refund of rebate claims as compared to duration of refund of rebate claims at Karachi Collectorates and double & ruthless checking of export consignments by Anti Narcotic Force. WeBOC system, he commented, is creating problems for exporters instead of facilitating them as there is lots of lacuna in the system.
In the WeBOC system, it is hell of job to rectify even a simple typographical error and requires so much time and hassle due to non-delegation of authority to local collectorate officials, he explained. He said a number of times issues regarding WeBoc were conveyed and discussed with departments concerned even before launch of WeBOC but nobody cared or took notice. Similarly, licenses of bonded carriers are suspended on start of every month, making the export and import processes stand still all over the country causing missing of vessels and financial loss to the exporters and importers, he elucidated.
Muhammad Ishaq Butt, who is also the Chairman of Sialkot Dry Port Trust , was of the opinion that help desk be formed immediately for facilitation of exports and imports round the clock and to rectify the errors and omission in the WeBOC there and then for smooth clearance of export and import consignments.
Moreover, he referred to the visit of ex-chairman FBR, Ali Arshad Hakeem to Sialkot Dry Port Trust in March 2013 wherein he approved a number of matters regarding up-country dry ports but besides his approval, necessary steps are yet to be taken. Later a number of meetings with FBR officials were held and consensus were achieved on various issues but mere issuance of notification is taking considerable time, he showed his disappointment on this lethargic attitude.
Muhammad Ishaq Butt demanded that all exports should be routed through up-country dry ports to make them financially feasible and for that necessary rules can be made and amended to make compulsory routing of regional exports and imports through up-country dry ports. He expressed grave concern over levy of 17 percent Punjab Sales Tax by Punjab Revenue Authority, Finance Department, Govt of Punjab by making amendments in Second Schedule of Punjab Sales on Services Act 2012 on Port Operators including Dry Ports with effective from May 22, 2013.
He said that it would severally affect the volume of the business being carried out through these dry ports. Due to levy of this tax, the services of the dry ports will become dearer and exporters of the respective regions will prefer to move their cargo to Karachi. He explained that diversion of business to Karachi would cause reduction of revenue in the form of duties and tax to the Punjab. Moreover, congestion at mother ports at Karachi will also be increased and the role of the dry ports will diminish.
He inquired why services of dry ports be subjected to Sales tax when five zero-rated exporting sectors i.e. Textile, Leather, Carpets, Surgical and Sports goods are exempted from Sales Tax. He added that these ports are providing ancillary services to these five zero rated sectors and Punjab Sales Tax on such services should not be levied. Ishaq Butt demanded immediate withdrawal of Punjab Sales Tax levied on the services of Dry Ports.
He referred that exporters are facing problems at Karachi Ports due to ruthless rechecking by ANF. He said that frequency of rechecking of Custom Bonded exports consignments is on higher side at Karachi Ports besides the fact that same consignments were examined by Custom and ANF staff at concerned up-country Dry Ports. He requires that profiling / categorization of the exporters be carried out so that consignments are to be checked accordingly with minimum opening of cartons. Excessive checking causes damage to the export goods and may face rejection by the customer. ANF authorities may use Custom Dept’s database for profiling and categorization.
He demanded that sufficient and trained staff of ANF be deputed at all the ports as there is considerable distance between Karachi Ports and due to insufficient staff, a number of export consignments missed vessels again causing financial loss to exporters and earned bad fame to the country.
He pointed out the widening trade deficit, poor state of affairs of the economy and worsening of law and order situation in the country. He said besides the aforementioned ailments and utilities outages, the business community especially exporters are making all-out efforts to boost the economy and exports for the country.
He warned that continuous ruthless double checking by ANF has forced the exporters to bypass the dry ports and send the consignments directly to Karachi ports which is against the objectives for establishment of up-country dry ports. He urged immediate and meaningful intervention by Secretary Ministry of Narcotic Control, DG ANF and high ups of TDAP and Ministry of Commerce for resolution of exporter’s problems.
Ishaq Butt was perturbed over the ever increasing exorbitant charges of Karachi ports that are affecting exports adversely while stressing the need of regulatory body which has to regulate all the matter relating to exports and imports through Karachi Ports, air ports and dry ports. He stated that exporters have to pay double port handling charges once at up-country dry ports then at Karachi Ports and this phenomenon discourages the exporters to use the dry ports. He intimated that every levy on the export consignments would increase the cost of doing business and thereby making exporters less competitive in the international market. He was of the view that there should be substantial reduction in Karachi port charges on export consignments routed through up-country dry ports if total elimination of these charges is not possible.
Another levy which is causing exports to hamper is the Sind Infrastructure Cess tax regime which is applicable to all the goods entering the province through sea or air, the chairman All Pakistan Dry Port Association said while pointing out this issue. He informed that a cess at the rate of 0.95 percent is levied on the C and F value of goods as determined by the Customs Department and it was started from 0.2 percent to now 0.95 percent. He said Levy of this cess resulted in substantial increase in the landed cost of imported goods.
Exporters of up-country regions are already on disadvantage due to inland freight cost and this infra-structure cess will further add to the cost of product making them less competitive not only with respect to international competitors but also with the national ones. He further explained that this cess is being received for using the roads of the Sind as intimated by department concerned but at the same time road tax is being collected from transporters too. This anomaly, he added, is tantamount to double taxation which is prohibited by law.
Butt explained that objectives of up-country dry ports were to remove the congestion at mother port of Karachi and to provide custom clearance facility to exporters and importers at their door step in order to facilitate and boost exports but exporters are reluctant to use dry ports for the reasons mentioned above.
Muhammad Ishaq Butt appealed to Minister for Commerce and Trade, FBR Chairman and all concerned to intervene immediately in order to resolve the issues mentioned above and to visit the up-country dry ports of Sialkot, Faisalabad and Multan to have first-hand knowledge of their issues and problem.