KARACHI: The Federal Board of Revenue (FBR) has declined the proposed provisional clearance of LED lighting products.
This was revealed when Appraisement East Collector Ashad Jawwad advised Appraisement West and Port Qasim to stop this practice with immediate effect and securities deposited during the interim period may be encashed accordingly.
LED/SMD/LVD bulbs and tube lights are exempt from customs duty and sales tax under Fifth Schedule to Customs Act, 1969 and 6th Schedule to the Sales Tax Act, 1990, respectively. Since these lights are also mentioned as locally manufactured under CGO 02/2017, the benefit of said schedules is not being allowed to these products in terms of the conditions thereof.
The importers of these products approached the Engineering Development Board (EDB), thereby EDB recommended provisional release of LED lights imported by two importers, which were forwarded by the Board to clearance collectorate. Subsequently, EDB requested the Board to allow release of imported LED lighting products against securities till the final decision by Alternate Energy Development and (AEDB). The AEDB also recommended provisional clearance of these products against securities till decision of ECC.
Collector Ashad Jawwad was of the view, the Board may take-up the matter of issuance of relief to individual importers on case to case basis by the EDB, as it creates distortion and rent seeking, hurting the normal business flow of this high-demand item.
Allowing individual relief also does not merit in this case where the issue of local manufacturing is identical for all importers of this item and there is no major difference in the LED lights imported by different importers. Besides such provisional relief to selected individuals also result in undue enrichment of these individuals at the cost of other importers and consumers.
Since both the EDB and AEDB have recommended for provisional clearance of these items against securities and a large number of consignments are pending clearance at different ports of Karachi, incurring huge demurrage costs to the importers, the Collectorates falling within the jurisdiction of Appraisement (South), after approval from Chief Collector Appraisement (South), allowed the clearance of these consignments provisionally, securing the differential amount in shape of Bank Guarantees / Pay Orders.
