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News Clips 24 December, 2013


[ GSP+ status: HS Codes to be synchronised with EU Codes ]
[ Inland Revenue fears huge losses on exemptions to export sector ]
 ]

GSP+ status: HS Codes to be synchronised with EU Codes   [ top ]

Business Recorder, December 24, 2013
The Federal Board of Revenue has decided to synchronise eight-digit HS Codes of Pakistan Customs Tariff (PCT) with the EU Codes to bring clarity and remove any type of confusion during export of Pakistani textile products to EU countries after GSP Plus status. Sources told Business Recorder here on Monday that the decision has been taken in a recent meeting held at the Textile Industry Division, Ministry of Commerce & Textile Industry on the GSP Plus status. 

More than 600 items mainly textile products will enter 27 members EU countries duty-free from January 1, 2014 for ten years. According to the decision, synchronisation of eight-digit HS Codes with EU Codes, or alternatively, would be done to establish equivalences. In this regard, guidance of the FBR Chairman has been sought to find the best solution. 

The synchronisation of Pakistani HS Codes with EU Tariff Codes would ensure smooth clearance of consignments to be exported to EU under the GSP plus status, sources said. A meeting was held at the Textile Industry Division with representatives of Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA), Pakistan Hosiery Manufacturers Association (PHMA), Pakistan Cotton Fashion Association (PCFA), Pakistan Sweater & Knitwear Association (PAKSEA) and Pakistan Textile Exports Association (PTEA) to develop a strategy for maximising benefits from GSP+ scheme. Secretary Textile Division, Additional Secretary Commerce Division and other officers of the Ministry were present. 

The authorities of Commerce Ministry congratulated the members of Apparel Associations on the country's acquisition of GSP+ status. They stated that the role of the Ministry was to facilitate the textile supply chain for higher value-addition, and increased export earnings. They stressed that this window of opportunity should be availed to the maximum in the first year, ie 2014, so that higher thresholds could be achieved in later years. 

The meeting also decided that the data of the Pakistan Revenue Automation Limited (Pral) would be shared by FBR with Textile Division to monitor performance of exports on a daily basis under the GSP Plus status. Textile Division would move a request to the FBR on urgent basis. 

It has been decided that a GSP+ Facilitation Committee to be set up for removal of regulatory bottlenecks related to Customs, ANF, FBR, SBP, Labour Departments, etc Textile Division would initiate the process in this regard to ensure early setting up of the committee. The meeting also decided the role of Associations in attestation of 'Certificates of Origin' for collection of shipment data on daily basis. It has also been decided that a new SRO to be drafted, or amendments be made to SROs 492 & 410 so that the import of fabrics and materials would be allowed for re-export of value-added exports and product diversification. 

Inland Revenue fears huge losses on exemptions to export sector    [ top ]

The News International, December 24, 2013
KARACHI: The office of Inland Revenue fears huge revenue losses due to the exemptions allowed to export-oriented sectors on the import of raw materials and has advised that duty concessions should be granted only on the production of exemption certificates issued by Inland Revenue officers, sources said on Monday.

A huge sum of Rs60 billion was granted under the concessions during the first four months of the fiscal 2013-14.The sources added the office also expressed dissatisfaction over the quantity of raw material imports by existing manufacturing units, which did not match with their production capacity.

In an official note sent to the Federal Board of Revenue (FBR), it said that under statutory regulatory order (SRO) 1125 (I)/2011 of sales tax, about 128 items related to textile, chemicals, sports goods and surgical goods are declared under special sales tax rates and concessionary income tax rates.

The office said that there were chances of misuse due to vast concessions granted under the SRO without check and balance.The sources said that the office of the Inland Revenue (IR) advised amendments to Income Tax Ordinance, 2001 and that the concession would apply only to a person who produced an exemption certificate issued by concerned IR commissioners.

The similar changes were also recommended in the Income Tax Ordinance, 2001 to make it mandatory for persons engaged in production of export- oriented goods to declare the quantity and quality of raw materials consumed against the capacity. Further, the entire record should be produced before the commissioner for obtaining an exemption certificate, according to the sources.

The FBR issued the SRO 212(I)/2013 of income tax in March 2013 that allowed special rates of income tax and withholding tax under the section 148 of the ordinance at one percent in the case of manufacturers and three percent in the case of commercial importers. These concessions were linked with the SRO 1125(I)/2013 for availing the exemptions and concessions.

Moreover, the revenue body was recommended that the concession for commercial importers should be withdrawn as the concessionary regime is negatively affecting the local industry. The chances of misuse of this regime is very high due to the facility allowed to commercial importers, the FBR was informed.

The IR office has launched an extensive work on concessionary regime and its misuse. Recently, one of the units of IR suggested the FBR to investigate all the exemption certificates issued to importers and manufacturers.

As per the data compiled by the Pakistan Customs, the cost of exemption on import of chemical under SRO 1125(I)/2011 increased to Rs444 million during July 1 – October 22, 2013 against Rs430 million in the same period of last year. Strangely, the import value of the goods decreased 10 percent to Rs2.955 billion in the aforesaid period from Rs2.69 billion earlier. 

JANG, December 23, 2013
   

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