KARACHI, June 28: Exporters have taken strong exception to the customs authorities move to send high tariff areas exports to Price Check Committee (PCC) resulting in long delays in payment of duty drawback thereby causing liquidity problem to exporters.
In the past only those exports were referred to PCC which were destined for low tariff areas such as Middle East and Africa. But exports for high tariff areas, including North America, Europe and Australia were generally exempted from verification by the PCC.
"We fail to understand the logic for taking such exports to PCC which are destined for high tariff areas because there was not question of over-invoicing the goods," asserted a leading exporter.
About eight years ago the Central Board of Revenue (CBR) had set up Price Check Committees (PCC) at export outlets of customs in order to control the menace of over-invoicing in export trade.
For the last six months the customs authorities unilaterally started taking all categories of exports to PCC resulting in long delays in payment of duty drawback and promoting corruption at examination stage of customs.
Undoubtedly, there had been over-invoicing in exports destined to low tariff areas such as Middle East and Africa but this practice could not be carried out in high tariff areas because this would render exports uncompetitive, another exporter said.
How could an exporter indulge in over-invoicing in high tariff areas such as US, which already has around 12 to 13 per cent import duty and European Union (EU) which has around 12 per cent duty, another exporter asked.
Presently there is only 3 to 4 per cent duty drawback on most of exports and in case if an exporter indulges in over-invoicing to high tariff area it would not be feasible for him because his buyer in Europe and US will not be able to sell the product.
In a PCC meeting held last week at Custom House, Karachi and chaired by Additional Collector-II (Exports), which was attended by around 24 exporters or their representatives the issue of over-invoicing came up. About 52 cases belonging to bedwear and fabrics were to be taken up by the PCC.
However, most of the prices checked by the PCC turned out to be fair and the collector himself agreed that there was no reason for putting these cases before the PCC. This irritated the participants who took strong exception to the situation, and, as a mark of protest, they walked out of the meeting.
Former chairman, Pakistan Bedwear Exporters Association (PBEA), Shabir Ahmed, who also participated in the meeting told Dawn that instead of wasting our time the CBR high-ups should hold a meeting to set guidelines and resolve the issue once and for all.
He said presently exporters were being harassed by customs officials at examination stage and those who gave them illegal gratifications their consignments are cleared and those who do not oblige their cases are referred to PCC and samples are drawn from the containers.
Shabir Ahmed said, "We do not support over-invoicing and the CBR should take all those unscrupulous exporters to the task. However, he said CBR should lay down some guidelines so that genuine exporters do not suffer.
He said: "If we are asked to waste time and our duty drawback payment is subjected to delay just because some one at the examination stage wants to twist our arm, there was no reason for us to enter into export trade."
Responding to a question, he said, undoubtedly a sort of 'transit trade' had been going on and some exporters used Middle Eastern ports where documents used to be changed for onward shipment to high tariff areas.
However, he said when the shipment is already destined to high tariff area there was no question of putting them before the PCC. Citing an example, he said the 52 cases referred to PCC last week belonged to bedwears/fabrics. When there is 13.1 per cent anti-dumping duty on bedlinen imports by the EU how could an exporter involve in over-invoicing? he asked.