ISLAMABAD, Oct 29: The ministry of industry and production is likely to chalk out a comprehensive mechanism for levy of provisional regulatory duty on the import of products that are causing injury to local items.
Well-placed sources told Dawn on Tuesday that the proposal was agreed in principle by Economic Coordination Committee (ECC) in its meeting held recently. Furthermore, a mechanism would be sorted out for seeking final approval of finance minister Shaukat Aziz, the sources said.
The ministry of finance in consultation with ministry of industries and production has recommended changes in the Customs Act, which would be submitted to the next ECC meeting for final implementation.
If came into effect, the main beneficiary of the duty would be Sino-Chemical Industries—manufacturer of calcium carbide— which closed down its units some 15 months back, milk powder, glass-sheet and shoes.
Under the recommended amendments in the section 18 (2) of the Customs Act, 1969, the federal government would be allowed to levy a regulatory duty provisionally for a period not exceeding 120 days, pending recommendation by the National Tariff Commission (NTC) within this period.
The duty will be levied at a rate not exceeding 100 per cent of the value of goods as determined under section 25 or section 25B, if such goods were specified in the Second Schedule, and at a rate not exceeding 50 per cent of the amount, which represented the value of the goods as determined under section 25 or section 25B, if such goods were not specified in the second schedule.
Explaining the need for amendment in the Customs Act, the source said Central Board of Revenue (CBR) was of the view that as per conditions agreed with the donor agencies, customs duty could not be enhanced from the existing maximum of 25 per cent.
Similarly, protection through anti-dumping, countervailing or safeguard laws could not be provided on immediate basis because it takes time to fulfil formalities, prescribed under these laws.
According to NTC, a minimum period of two months was required for imposing countervailing duties after acceptance of the application.
On the other hand, the stakeholders were of the opinion that the preparation of application itself required one to two months.
This time period of three to four months was considered too long to save the local industry because by the time corrective measure were taken the industry is closed down.