KARACHI, Nov 17: Ship-breaking industry is on the verge of total collapse owing to large-scale import of re-rollable material under the garb of ferrous (re-meltable) scrap which does not have duty and sales tax at import stage.
The Pakistan Ship-Breakers’ Association (PSBA) has taken up the issue with the chairman, Federal Board of Revenue (FBR), Abdullah Yusuf, and pointed out that it was not only causing huge revenue loss, but also damaging the ship-breaking industry.The ship-breakers alleged that large-scale import of re-rollable material was being cleared by the Model Customs Collectorate (MCC) under the Customs Administrative Reforms (CARe), thereby causing severe damage to ship-breaking industry which provides jobs to a large number of skilled and unskilled workers.
PSBA chairman Azam Malik said due to rampant import of re-rollable scrap under the garb of re-meltable material which does not have 15 per cent sales tax at import stage, it has become impossible for the industry to import ships for scrapping which are presently being quoted at $490 to $520 per ton in the world market.
The government in the budget 2007-08 increased the assessable value for import of re-rollable scrap from $290 per ton to $400 per ton, but the customs authorities did not feed these tariffs in their computer system which caused millions of rupees loss to the national exchequer.
Undoubtedly, he said after the introduction of CARe, there is fast clearance of goods at the customs stage which saves importers from extra cost and long delays.
However, PSBA chief said under this automotive system of clearance a very large number of container loads of re-rollable scrap is making its way into the domestic market.
He also said a huge quantity of misdeclared scrap, such as used ship chain, shafting, pipes, moon shape pipes, channels etc., are available in the local market.
Similarly, he said a large number of trucks loaded with moon shaped pipes (PHARA) are available in the market who are making their way from Taftan and Quetta through RCD highway after being cleared under the garb of re-meltable scrap.