KARACHI: MCC Quetta has approached Federal Board of Revenue (FBR) and forwarded recommendations of trade bodies, importers and local businessmen that customs values of goods imported from Iran via land route should be reduced by 20 percent compared with the values of similar goods being imported from the rest of the world.
Chamber of Commerce & Industry Quetta, All Pakistan Customs Agent Association-Quetta Chapter and local Importers have been agitating against the values fixed by the Directorate General of Valuation-Customs Karachi of the Iran origin goods imported via land route through Pak-Iran border.
As per their submissions, the value of such goods and cost incurring in importing these goods is lesser than the goods imported through sea route, but their values have been fixed by the Directorate General of Customs Valuation, Karachi at par with the goods imported via sea. Consequently, they have requested for review of valuation of such goods keeping in view the peculiar economic, social and security circumstances prevalent in Baluchistan province.
The contention of Importers / Chamber of Commerce & Industry Quetta has been examined and it transpires that a sizeable portion of goods imported via land route from Iran include carpet, Ceramic Tiles, Glassware, Whey Powder, milk powder, Almonds, Dates, etc for which the following Valuation Rulings have been issued by the Directorate General of Customs Valuation, Karachi and the same are being assessed accordingly.
An in-depth analysis of the cost, freight and other components of assessable values of Iranian goods imported via land route vis-a-vis sea route indicate that the contention of the local importers deserves consideration as the Iranian exporters sell their goods to the Pakistani Border traders on almost ex-factory price without charging freight. Even goods originating from Zahidan attract less freight being around 100 km from Taftan as compared to around 900 km from Bandar-Abass in addition to sea freight in case of goods imported via sea port.
The importers from Baluchistan pay the Iranian sellers in Iranian Tomans, while the importers in Karachi and in other cities make their deal with Iranian seller by paying in USD, Euro, UAE Dharam etc, thus they bear additional cost as compared to Baluchistan importers.
After import, the Balochistan traders have to bear high freight charges on account of inland transportation, of imported goods via land route, which is around 640 km from Taftan to Quetta.
The Iranian goods are comparatively of inferior quality and available at cheap rates in local markets. Mostly, trade among the Pak-Iran bordering traders is made on the basis of barter system.
Due to prevalent economic and serious law and order situation, lack of industry/agriculture and employment opportunities, dynamics of Baluchistan are altogether different as compared to other provinces.
Collector Quetta Saeed Jadoon has put in best efforts to streamline procedures at all land / border stations to collect duty taxes and to discourage smuggling. Due to these efforts, collection of duties and taxes during March 2015 to November 2015 has substantially increased by 170percent when compared with the corresponding period of the last financial year.
However, for sustainable improvement in tax culture and revenue collection, reliance cannot be made solely on enforcement measures especially in an environment plagued with feelings of deprivation, lack of opportunities and insecurity. Enforcement measures need to be coupled with providing competitive and enabling environment to the traders for voluntary and effective compliance of tax laws.
Keeping in view the above submissions, MCC Quetta notes the Board may consider allowing at least 20 percent concession in valuation rulings of Iranian origin goods imported via land route through a clarification by the Board / Director General of Valuation.
Alternatively, the goods imported via land route from Iran may be excluded from the Valuation Rulings issued by the Directorate General of Valuation and the Collector may assess such goods under section-25A of Customs Act, 1969.