KARACHI, Sept 5: Molasses exporters are seeking exemption from sales tax because it blocks huge amount of around Rs337.50 million on export of about 1.5 million tons of molasses per annum.
In a presentation to Minister of State and Chairman Export Promotion Bureau Tariq Ikram, Terminals Association of Pakistan (TAP) has sought immediate exemption from sales tax paid at the time of purchase of molasses from sugar mills.
The association pointed out that since the collected sales tax is refunded, but not before wrecking the export business of molasses by way of creating liquidity problem and enhancing the cost, therefore, there was no logic to impose it at all.
The TAP lamented that in order to meet sales tax conditions, the molasses exporters have to obtain “molasses export certificate” from Pakistan Sugar Mills Association, Islamabad, through sugar mills for onward submission to Collector of Customs and Export Promotion Bureau before commencement of loading of molasses on board of each and every vessel.
It further stated that on many occasions, and due to ambiguities between sugar mills and PSMA, the exporters could not obtain “molasses export certificate” in time and in absence of the same, exporters have to face a lot of hardship to complete export documents and other formalities.
Since monitoring of export of molasses is already available at the end of customs, as such, PSMA Islamabad’s certificate thereof has no use and is unnecessarily creating problems to exporters, the TAP asserted.
The molasses exporters association drew the attention of the minister towards delay in issuance of notification with regard to the new trade policy.
Under the Trade Policy 2002-03, the Export Development Surcharge (EDS) will be levied at the time of negotiations (i.e. final conclusion of export) of export document. However, the association complained that since there is no notification in this regard, exporters have to deposit EDS on commencement of loading before the Collector of Customs. This is in addition to the one per cent withholding tax paid on every shipment, it added.