ISLAMABAD, May 31: The government decision to exempt 16 buses from duty and taxes has resulted in a revenue loss of Rs50.799 million to the national kitty. These busses were imported by a private company.

An official told Dawn on Wednesday that the decision of waiver of customs duties, sales tax and withholding tax on import of these buses was taken in a meeting of the Economic Coordination Committee (ECC) of the cabinet presided over by Prime Minister Shaukat Aziz recently.

According to the official documents available with Dawn, Daewoo Pakistan Express Bus Service Limited had requested the prime minister for matching compensation of losses in the shape of exemption from customs duty, sales tax and withholding tax for the import of certain number of buses and spare parts.

According to the company, the mob protesting against the publication of blasphemous images on February 1 in Peshawar burnt 16 Daewoo buses, three vans and a car, the documents said.

Interestingly, without a formal approval by the ECC, the Central Board of Revenue had already given a physical clearance of 16 buses that reached Pakistan against an undertaking that a final clearance regarding exemption would be according to the ECC decision.

Sources said the company had been in operation since 2003-04. “The front man of the company was a Korean national but the actual owners of the company were Chaudhrys from Gujrat,” the sources claimed.

The buses burnt were also insured with a private bank, which means that the company has already received compensation for the loss and the tax exemption by the government will be an extra relief to it, the sources add.

According to the Punjab’s government letter No SONTS1-17\99(subsidy) issued on April 22, an amount of Rs16.2 million had been approved for subsidising the interest on the loan received by the company from Pakistani banks.

Under the proposal moved by the CBR in this regard, the board also supported the company’s request for the import of 32 buses without customs duties, sales tax and withholding tax to compensate them fully at the cost of national exchequer.

The CBR even proposed to allow duty-free import of tyres, lubricants and parts, the sources said.

The prime minister in the ECC meeting, however, dropped the CBR proposal and gave approval of the duty exemption to 16 buses, which had already reached Pakistan and were cleared against undertaking.

In case of duty-free import of 32 buses by the company, the net revenue loss to the national exchequer will be to the tune of Rs101.594 million.