KARACHI, June 5: The process of opening letters of credit (LCs) for agriculture products has slowed down since the commodity markets are in state of panic over the government’s possible move to levy 15 per cent general sales tax and five per cent import duty on the same.

“There is a wait-and-see position and importers are now reluctant to open fresh LCs, said chairman Karachi Wholesale Grocers Group (KWGG), Anis Majeed.

He told Dawn that importers fear that if they open LCs today — then the consignments will reach the port after the budget and they will have to pay additional duties and taxes to clear the consignments if GST and customs duty on farm products are imposed in 2002-03 budget.

Currently there is no GST and import duty on various agriculture products.

Taking the case of pulses, Anis said that the commodity constitutes a major portion of poor man’s budget of food item and any levy of taxes and duties would hit the business and common man.

He said local production of pulses in the last two years has remained unsatisfactory because of drought.

The KWGG has written a letter to President Gen Pervez Musharraf on May 5, saying that levy of taxes on agriculture produce will encourage smuggling from neighbouring countries thereby also depriving importers and traders from their legitimate business.

He urged the president to review any such decision which goes against the common man who is already suffering from high prices of other food items.

Smelling changes in duty and taxes structure in the budget, importers have already brought 63,575 tons ($18 million) of pulses from abroad, showing a rise of 82 per cent in quantity and 85 per cent in value as compared to the same period of 2001, which was 34,913 tons ($9.6 million).