Federal budget proposes to set up tax-free Border Sustenance Markets

KARACHI: Government has planned to develop Border Sustenance Markets to mitigate the problems faced by the people residing in border areas due to fencing and counter-smuggling measures.

It may be mentioned here in January this year Pakistan and Afghanistan agreed to establish “border sustenance markets” in the two countries to boost local trade and economic activity in the border regions.

The agreement was reached during a telephone conversation between Pakistani Foreign Minister Shah Mehmood Qureshi and his Afghan counterpart Mohammad Hanif Atmar, according to a Pakistani Foreign Ministry statement.

Highlighting Pakistan’s policy to strengthen trade between the two countries, Qureshi drew Atmar’s attention to the proposed markets, expressing hope for a formal pact on the markets soon.

Reiterating Pakistan’s consistent support for a peaceful, stable and prosperous Afghanistan, Qureshi said intra-Afghan dialogue provided a historic opportunity for the Afghan leadership to achieve an inclusive, broad-based, and comprehensive political settlement in Afghanistan.

The specified goods when supplied within the limits of the Border Sustenance Markets, established in cooperation with Iran and Afghanistan, will be exempted from the whole of the sales tax.

If such goods are brought outside the limits of such markets, sales tax will be charged on the value assessed on the goods declaration import or the fair market value, whichever is higher.

Moreover, such items in case of import, will be allowed clearance by the Customs authorities subject to furnishing of bank guarantee equal to the amount of sales tax involved and the same will be released after presentation of consumption certificate issued by the concerned Commissioner Inland Revenue.

According to the budget proposal, the said exemption will only be available to a person upon furnishing proof of having a functional business premises located within limits of the Border Sustenance Markets.

The goods to be exempted from sales tax in Border Sustenance Markets include vegetables, dried leguminous vegetables, seeds of vegetables, knives and cutting blades for paper and paper board, milk and cream, fruits, green tea, sugar syrup and lactose, sewing and embroidery thread, kitchen appliances, household articles, glassware, wheat flour, bicycles and delivery tricycles.

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