Pakistan Association of Large Steel Producers has disclosed that large-scale misdeclaration of prime steel/ brand new steel as re-rollable scrap is resulting in an annual revenue loss of billions of rupees to the exchequer.
In a letter to the Ministry of Commerce Special Secretary, the Pakistan Association of Large Steel Producers Secretary-General said that this activity is happening for many years in an organized manner.
He said that this has been happening due to loopholes in the Import Policy Order (IPO). The revenue loss could be plugged very easily by making corrections in the IPO, he added.
The letter stated that during the last 8 years or so, evidence-based data from the exporting countries shows the export of brand new steel to the tune of one million tons annually to Pakistan.
However, interestingly, Pakistani Authorities (Customs) allow the import of the same brand-new steel as re-rollable scrap and levy duties on re-rollable scrap.
He said that the Pakistan Association of Large Steel Producers has been pursuing this issue with the Ministry of Commerce as well as FBR for a long and in the budget for the fiscal year 2021-22, the issue was partially resolved by FBR through an amendment to the Customs Act, 1969.
The practice of allowing mutilation of goods was disallowed after the filing of the Goods Declarations (GDs), after this amendment, rollable material that was previously mutilated at ports, now it is being brought after cutting off the prime steel in equal lengths of 2.5 meters in length.
The ministry can stop this practice and could save revenue tune of billions of rupees annually by making a small amendment to the relevant rule of the IPO.
The association also submitted a copy of the research report on the subject that explains how large-scale misdeclaration of prime steel as scrap has been hitting the national exchequer while destroying the documented steel manufacturers.
Source: Pro Pakistan