ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is expected to allow on Wednesday removal of additional customs duties (ACDs) on 152 tariff lines and take up a request of the Petroleum Division for settlement of circular debt affecting oil and gas supply chain.

The meeting, to be presided over by Finance Adviser Dr Abdul Hafeez Shaikh, the ECC meeting would be taking up a seven-point agenda including supply of 500,000 tonnes of federal wheat reserves to Khyber Pakhtunkhwa and payment of arbitration award and costs to Broadsheet LLC in a case lost by National Accountability Bureau (NAB).

Informed sources said the removal of ACDs on 152 tariff lines on horizontal basis have been moved by the Ministry of Commerce on the recommendations of Tariff Policy Board (TPB) under National Tariff Policy 2019-24. TPB believed the decision would help provide cheap raw materials to the industrial sector, reduce cost of doing business and improve competitiveness of Pakistani goods by correcting anomalies in the existing tariff regime.

The government had abolished import duties on 1,623 tariff lines pertaining to basic raw materials and intermediate goods through the Finance Act, 2020. Besides, additional customs and regulatory duties on 164 items related to textile sector, not manufactured in Pakistan, were also removed.

The commerce ministry had said recently that the government was gradually phasing out duties on industrial raw materials to revive troubled manufacturing sector and planned to abolish additional customs and regulatory duties on 30,000 items of raw materials this fiscal year. The tariff rationalisation will have negative revenue impact of Rs14 billion during current fiscal year.

Informed sources said the ECC was expected to take up a summary for approval of payment of over Rs4.4bn to Broadsheet LLC — a British firm — after NAB lost an arbitration case in London courts.

NAB has moved the summary on ‘International Arbitration — Broadsheet LLC vs GOP (through NAB): Payment of Part Final Award (Quantum) and Part Final Award (costs)’.

Informed sources said Broadsheet — a firm registered in Isle of Man — was hired in 2001-02 by NAB under the Musharraf government to probe leading Pakistani citizens including the Sharif family, but then terminated the contract. NAB lost the arbitration and then appeals. As a result, the British courts awarded about $21.6 million as Part Final Award (Quantum) and about $5.6m as Part Final Award (costs) — making the total to over $27m. The ECC will today take up payment issue. Pakistan has already made some payments to avoid freezing of its funds in British banks.

The ECC will also be taking up a request of the petroleum ministry for settlement of circular debt dues as companies were facing serious financial constraints owing to ­non-payment of dues by the power sector entities.

Published in Dawn, November 4th, 2020