ISLAMABAD, Oct 29: The Northern Areas Chamber of Commerce and Industries (NACCI) has asked the government to immediately stop collection of customs duty at Sost checkpost and remove its offices from Sost and Gilgit.
The Central Board of Revenue (CBR) has no authority to set up any kind of customs, income tax or sales tax offices in the Northern Areas, said NACCI president Shehbaz Khan in a statement sent to Dawn.
He said as per the Supreme Court decision, the people of Northern Areas were first entitled to get all fundamental rights guaranteed under the Constitution and then they were liable to pay any kind of taxes provided the taxes are imposed by a competent authority.
He said according to Article 77 of the Constitution of Pakistan, the only competent forum to impose taxes was the Parliament and not any executive authority or ministry like Kashmir Affairs and Northern Areas (KANA).
“The presence of tax offices in any shape in the Northern Areas to collect taxes and duties from the people is totally unconstitutional and illegal, as the Area is outside the territorial limits of Pakistan,” the NACCI president said.
Citing the decision of the Law Ministry about Northern Areas that “in view of the undecided constitutional status of the Northern Areas, the commissioner, income tax, Rawalpindi zone, cannot extend the jurisdiction of its subordinate office to the said Areas,” Shahbaz Khan said how the collector of customs, Rawalpindi, has the jurisdiction to extend its subordinate office to Sost and Gilgit to collect taxes and duties from the people of Northern Areas on their trade to and from China or any other country.
He said that despite the fact that the ministry of KANA withdrew on April 3, 1999 the levy of income tax extended to Northern Areas and the CBR was directed not to charge the income tax on imports at Sost but, he added, the Customs authorities in violation of the order continued to charge the same till now.
The NACCI president further said that the income tax was also being deducted from the bills of government contractors in the Area with special reference to defence contracts.
CBR official spokesman and member direct taxes, Vakil Ahmed Khan said that following the decision of the Supreme Court, the levy of income tax in the Northern Areas has already been withdrawn. The issue was under consideration of the ministry of KANA for final decision and CBR has nothing to do with it, he added.
To compensate the people of Northern Areas, the NACCI president had demanded of the authorities to declare the region free trade zone like Gwadar free port; withdraw the extension of Customs Act, 1969; Sales Tax Act, 1990, from the Area immediately.
He also demanded that those goods/commodities imported by the local people should be allowed duty-free.
To check the misuse of the facility, he proposed that the facility should only be allowed to importers, traders, unemployed youth having domicile of Northern Areas.
Moreover, the goods and commodities imported by local should be stamped as “for consumption in Northern Areas only”, he added.
Commenting on the demand of withdrawal of the Sust post from Northern Areas, a senior customs official said that the post was established in March 24, 1984 in the area following the decision of the Economic Coordination Committee (ECC).
He said earlier the people of the area were quarrelling over the selection of place, which was finally settled in consultation with experts, which would provide employment opportunities to the local people.
The official said that in case the post was established in the settled areas it would create problems for the common consumers who would undergo a thorough check at these post while coming down into the settled areas.
Furthermore, he said that most of the items imported from China were not for consumption in the local areas so it would be easily smuggled down to country, which would cause loss to the local production.