ISLAMABAD: The Standing Committee on Finance has directed the Federal Board of Revenue (FBR) and Ministry of Commerce to finalise a new list of items on which regulatory duties (RD) should be imposed in two weeks’ time.

Confusion was witnessed as to which authority wanted to impose RD as the commerce ministry and the FBR blamed each other.

Numerous complaints were received by the standing committee from manufacturers regarding the recently imposed RD on imported raw materials. In this regard, a query was placed in front of the relevant authority.

FBR Member Customs, Zahid Khokhar informed the committee that RD has not been imposed as a revenue measure to generate more income for the national treasury but it was imposed upon the request of the commerce ministry to discourage imports.

Chairman of the Committee Senator Saleem Mandviwalla questioned the commerce ministry officials about the reasons for imposing RD on raw materials.

Additional Secretary Commerce Anjum Amin said the official stance of the commerce ministry is to encourage exports.

“We have stated it earlier in the meetings with the FBR that imposing RD on raw material would lead to costly production and make exports unviable,” Mrs Amin said. “We had given a list of non-essential items over which we wanted to have the RD imposed,” she said.

“However, the FBR made a complicated issue of it and added whatever they wanted — as a result everybody is complaining,” she explained.

Another official of the commerce ministry said that they were not even informed about the final list of items.

Senators Saud Majeed and Mohsin Aziz inquired the reasons for the changes in list of items. They were informed that the final list was approved by Secretary Commerce.

The senators expressed concerns over the confusion between the ministries. It was decided that the FBR and Commerce Ministry would sit together and finalise the list in two weeks.

The commerce secretary was also criticised for not sharing the information with relevant officials who were part of the discussion.

Later talking to the media after the meeting, Senator Mandviwala said that distortions and confusions were mainly due to the lack of sincerity on part of the government.

“With finance minister on the run and some departments seeking his arrest, how can the things operate through social media network,” he questioned.

He alleged that the finance minister was only available at WhatsApp and the FBR officials were doing what is best in their own capacity.

“The government should replace him with a new finance minister,” he said.

Pama seeks RD exemption

Welcoming the imposition of regulatory duty (RD) on import of some completely build-up (CBU) vehicles, the Pakistan Automotive Manufacturers Association (Pama) on Thursday said the levy on protectors, evaporators, and condensers used in making of locally produced air conditioners will be counter-productive.

Pama also expressed its dissatisfaction over the 20 per cent imposition of RD on tyres for use in SUVs which are not manufactured in Pakistan.

The association urged Chairman FBR Tariq Mehmood Pasha to exempt protectors, evaporators, condensers and tyres which are imported under SRO-655 and 656 from the levy.

Pama recalled that the RD was also previously under SROs 131(I)-2015 and 246(I)-2015 on steel products which were of direct use by the auto industry and were, unquestionably, not manufactured locally. However, the industry had to absorb impact of the same.

The association said that previously additional duty was not applicable to the items subject to RD. This was done by inserting the then regulatory duty SRO-568 as clause in the additional duty SRO 1178/2015.

Now, the RD SRO-568(1)/2014 stands superseded by SRO-1035(1)2017 the old position needs to be restored by an amendment in SRO-1178(1)/2015 replacing the superseded number SRO-568 by the new SRO-1035(1)/2017.

Published in Dawn, November 17th, 2017