The Government is expected to defer the consequence of millions of rupees on imported products to be cleared by 30 June 2020, well-informed sources told Business Recorder in the Federal Board of Revenue.
In its letters dated 14 April 2020 and 30 May 2020, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) reported that the outbreak of the Covid-19 pandemic and its subsequent lockdown are severely disrupting economic activities.
The economic effect has been extremely hostile as the government has shut down entire industry and business sectors to monitor the spread of Covid-19, putting a huge crimp on all financial, trade, and trading activities for the coming months.
Importers are therefore unable to ex-bond their consignments in the prevailing circumstances within the time limit set out in section 98 of the Customs Act, 1969. The warehousing period as defined in the section is six months and all overloaded consignments are subject to a punitive surcharge on clearance 1 per month in respect of duty / taxes.
FPCCI has directed that the Federal Revenue Board consider granting the waiver of the penal surcharge on overstayed consignments until 30 June 2020 in order to mitigate importers’ problems due to exchange rate volatility and other unforeseen constraints on a variety of commercial and economic activities caused by the Covid-19 pandemic.
The FBR has looked into the matter, saying that due to exchange rate fluctuations, combined with other negative economic factors, importers seem indecisive to clear the bonded products within the prescribed time limit.
The data analysis reveals that consignments worth roughly Rs6,822 billion involving Rs4,354 billion duty and taxes are overstayed in bonds involving a punitive surcharge to the amount of roughly Rs630 million.
In response, the FBR has proposed to the cabinet that:
- The warehousing term for goods already warehoused may be extended until 30 June 2020;
- The penal surcharge livable on such goods may be remitted only for goods cleared from the warehouses during the period from the date of issue of the notification until 30 June 2020.