KARACHI, May 13: The pharmaceutical industry has been allowed to clear raw materials from the customs without giving bank guarantees or indemnity bonds. The industry will now have to give an undertaking till such time the issue of sales tax was resolved.

Member (customs) CBR Dr Manzoor Ahmed issued an order in this regard, waiving the condition of bank guarantees and indemnity bonds till such time the matter pertaining to sales tax on raw material imported by pharmaceutical industry was resolved.

The issue was raised by Karachi Customs Agents Group (KCAG) president Sultan Mahmood in a meeting with the member (customs) CBR here on Saturday.

The KCAG president drew the attention of the member customs towards misinterpretation being made by the customs of SRO 211(I)/2002 and are seeking bank guarantees and indemnity bonds for the release of raw material imported by the pharmaceutical industry. Upon this the member customs immediately passed an order, advising the authorities not to seek bank guarantee or indemnity bonds.

In order to ensure uniformity in the valuation of goods cleared at different customs points, Dr Manzoor said efforts were under way to link all the customs stations on line and once it was done the issues would be redressed.

The KCAG president was of the view that since other customs stations are resorting to valuation of goods at lower rates, the business was shifting to dry port, causing revenue losses to the Karachi Collectorate and lesser earning to the groups’ members.

Referring to the point raised by Sultan Mahmood that customs authorities are not accepting the declared value of goods and instead dictate their own price on one pretext or other, Dr. Manzoor Ahmed assured the KCGA of resolving the issue in due course of time.

Sultan Mahmood demanded that the GATT code of valuation system should be implemented immediately and transaction value be accepted and in case, transaction value was not acceptable, valid reason within the framework of law should be provided.

He further said that in many cases when the bills of entry were completed under section 81 of the Customs Act 1969, the same were sent back to the group concerned by the valuation department, advising them that they should decide the case at their own level in terms of section 25 of the Customs Act 1969 (IV of 1969).

It was also brought to the notice of the member customs that there was undue interference of various agencies — FIA, DIT and coast guards — as they were illegally exercising powers of Section 25 of the Customs Act 1969(IV of 1969).

Dr Manzoor said a meeting would be called to resolve the issue of harassment and long delays in handling of documents at Customers Service Centre (CSC). He agreed also with the KCAG president that the working at CSC was not satisfactory.