March 31, 2007	Saturday	Rabi-ul-Awwal 11, 1428

KARACHI, March 30: The Central Board of Revenue (CBR) has laid down a condition of submitting certificate of origin on import of polyester fabrics from United Arab Emirates (UAE) after coming to know that third country fabrics are being imported by circumventing the provisions of the import policy.

The CBR took the action on a plea that unbridled import of polyester fabrics was causing injury to the local industry.

It has been pointed out that any imports of polyester fabrics coming from the UAE without the certificate of origin of the manufacturer will be deemed to be a banned item.

The customs authorities will also not accept such certificates issued by any authorities of the UAE which may be confirming the origin of imported polyester fabrics.

However, the CBR move is being taken to solely check flow of polyester fabrics originating from India through UAE because lately there has been flood of Indian fabric in the domestic market. Presently, most of such imports are originating from UAE, Hong Kong and Bangkok, customs officials said.

But customs agents believe that 90 per cent of imported polyester fabrics are originating from UAE and being cleared through CARe working under Model Customs Collectorate (MCC). There is strong perception that due to under-invoicing there is huge revenue loss to the national kitty.

Nevertheless, a strong argument is being equally thrown against this theory that under-invoicing is causing revenue loss. It is being put forward that by creating hurdles it will only encourage smuggling which will ultimately result in heavy revenue loss.

In order to discourage smuggling of fabrics the CBR reduced customs duty and taxes on its import from 53 per cent to 15 per cent only. It allowed fabrics clearance through CARe which facilitated importers to clear their consignments in shortest possible time. Even if the move is to check import of Indian fabrics it will not be succeeded as importers will take route other than UAE, a customs agent opined.

President All Pakistan Customs Agent Group Arshad Jamal told Dawn that in the past all sorts of fabrics were being smuggled in large quantities which totally deprived the national exchequer from revenue. However, after the duty was reduced and free import was allowed the smuggling came to an end.

“I must say that the industry has been blackmailing the government but the fact is that smugglers after losing a big item (fabrics) were trying to bring it back under the fold of restricted items in one way or the other,” he asserted.

Mr Jamal was not ready to buy the idea that under-invoicing was being done on import of fabrics saying that after every two months the valuation was made for the fabrics for customs purposes and members from private sector and customs officials determined the new value based on per kg of fabrics.

If any restriction is going to be imposed it will encourage smuggling and it would be better only to check import of fabrics originating from India and the rest should be left to market forces, he added.