ISLAMABAD: Member Customs, Federal Board of Revenue (FBR), Mohammad Zahid Khokhar said on Tuesday that the issue of regulatory duty (RD) on tyres would be addressed in the new summary to be sent to the Economic Coordination Committee (ECC) of the cabinet for raising RD on certain items.
The FBR member customs informed the Senate Standing Committee on Finance here on Tuesday that the proposal of the FBR to increase regulatory duty (RD) has been deferred on the objections raised by Commerce Ministry. The issue of tyres would be resolved in the new summary to the ECC on RD.
The FBR informed that in order to improve balance of payment position by reversing the trend of widening trade deficit, the ECC in its meeting held on October 6, 2017, approved the proposal for increase/levy of regulatory duty (RD) ranging from 10% to 30% on a number of nonessential, luxury and locally produced items. Consequently, the FBR issued SRO 1035(1)/2017 dated 16 10 2017 in terms of section 18(3) of the Customs Act, 1969, resulting in the levy of RD on 27 new items (137 Tariff Lines) and increase of RD on 31 existing items (219 tariff lines).
A large number of representations were received against above levy/increase of the RD, from different stakeholders. Simultaneously local manufacturers of various items also approached the FBR with proposals for levy/increase of RD on certain locally produced goods to encourage import substitution. Some trade associations also approached Senate Standing committees on Finance of both houses – the National Assembly and the Senate. The Senate Standing Committee on Finance, Revenue, Economic Affairs and Narcotics Control, after conducting several hearings recommended forming a committee and considering all the representations regarding RD filed by different stakeholders during meeting held on 16th November, 2017.
Resultantly an Inter-Ministerial Committee, comprising representatives from FBR, Ministry of Commerce and Ministry of Finance was constituted which held several meetings and also consulted the Textile Division, Engineering Development Board and National Tariff Commission. A total of 53 representations were received from different stakeholders. In 41 representations, the importers and local manufacturers sought removal/reduction or partial exemption from RD claiming, inter alia, the same are input goods for their industry. In 12 representations, the local manufacturers sought protection against cheaper imported goods through the imposition/enhancement of RD. Certain anomalies in the existing duty structure were also identified in some representations with a request for rationalization.
Three meetings of the aforesaid inter-ministerial committee were held in the FBR (on 21st 22nd and 23rd November, 2017). Officers from National Tariff Commission and Engineering Development Board were also associated. However, the committee could not decide on fabrics and yarns and it was decided that input from Textile Division may also be taken. Hence a follow up meeting was held on December 04, 2017, to take up textile related issues, in addition to other representations which could not be decided in previous meetings. The committee has examined all the representations regarding removal, rationalization and imposition of RD and made recommendations.
Keeping in view the recommendations made by the committee and to rectify tariff anomalies, FBR submitted a summary to the ECC of the cabinet. The ECC of the cabinet discussed the summary in its meeting on 22.12.2017. FBR will take further necessary action on the receipt of decision of the ECC of the cabinet, FBR added.