Traders move imported goods to bonded warehouses, as port terminals refuse to waive demurrage
KARACHI: As the terminal operators and shipping companies have refused to waive demurrage and detention charges, traders of imported goods have started moving their consignments to bonded warehouses. Dutiable goods can be stored at bonded warehouses without payment of import taxes for a period of six months. Importers only pay taxes on the quantity of goods removed from the warehouses. As such, traders pay taxes in parts avoiding immediate burden of taxation. An official said there had been a sudden surge of traffic at bonded warehouses as ports had refused to waive penalties, while expectations of further improvement in rupee value against greenback compelled importers to in-bond the goods. “Duty and taxes are imposed on the value of imported goods in dollar, and strong rupee would save additional amount that importers would pay at dollar at higher levels.” Traders of imported goods have asked the authorities to waive one percent customs duty imposed on transfer of cargo to bonded warehouses from the port till June 30, 2020. Chairman Standing Committee (Customs) of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said importers had to pay one percent additional Customs duty when goods were moved to bonded warehouses from the ports, while goods in bonded warehouses had to be removed within six months. “After six months, importers have to pay surcharge, which at time surpass the value of goods. Now that the markets and businesses are closed due to the lockdown, traders are unable to take delivery of their consignments.” Chuhra demanded of the government to waive one percent additional Customs duty along with surcharge on overstay of goods till June 30, 2020. He also demanded waiver of the surcharge already imposed on importers. The ports are witnessing severe congestion as the importers are unable to take delivery, and containers are piling up. Khurram Aijaz of Customs Agents Association said terminal operators and shipping lines were not waiving demurrage and detention charges, which was one reason consignments were not being removed from the ports by importers. “Trader’s cash lines have dried up as the markets are closed. Most of them cannot even pay the banks to get their documents released, let alone demurrage and detention to the tune of millions”. “Terminal operators should provide relief to the traders, so that the cargo is removed making space available for the new shipments. Importers would get their consignments transferred to bonded warehouses, where space was still available along with option to pay taxes during the course of time”. He said traders had no money and couldn’t pay demurrage, detention. “They would better leave the goods perish at the port.” Aijaz also complained of no measures at the offices of terminal operators and shipping companies to protect against the COVID-19. It may be mentioned here that these terminal operators and shipping companies are foreign entities, and they repatriate the revenue earned in Pakistan.