Banned items that landed till Aug 18th: ECC takes step to clear consignments stuck at ports

The Economic Coordination Committee (ECC) of the Cabinet Wednesday directed that the consignments of previously banned items that landed in Pakistan till 18th August 2022 may be released at the rate of surcharge to clear consignments stuck at ports.

Federal Minister for Finance and Revenue Miftah Ismail presided over the ECC meeting virtually on Wednesday which considered a summary of the Ministry of Commerce on clearance of consignments stuck at ports.

The Commerce Ministry had proposed that a direction may be passed that the consignments of previously banned items that landed in Pakistan till 18th August, 2022 may be released as per the rates of surcharge contained in MOC’s OMs; and the SROs 1571(1)12022 and 1572(1)/2022, both dated 22nd August 2022, shall not apply on the imports/consignments falling/covered under the mentioned OMs.

The ministry moved a summary to the ECC while stating that in order to curtail the rising current account deficit (CAD), Ministry of Commerce, with the approval l of the Cabinet, imposed ban on import of about 33 categories of luxury and non-essential items on May 19, 2022. The said ban has been withdrawn, with the approval of the ECC/Cabinet, on August 19, 2022.

Besides lifting of the ban, the ECC/Cabinet also directed that the goods that had been imported in violation of the SRO 598(1)/2022 and were stuck at ports, shall also be released subject to payment of certain rates of surcharge/penalty on the basis of assessed value of the goods, i.e., between five percent to 100 percent.

33 categories, 860 products: ECC approves lifting of ban on wide range of goods

The ECC further directed that a summary for imposition of Regulatory Duties (RDs) on the erstwhile banned items shall be submitted to the ECC/Cabinet at the earliest. In pursuance to the said direction of the ECC, Ministry of Commerce, after due deliberations with the relevant stakeholder and recommendations of the Tariff Policy Board, submitted a summary dated 21th August 2022 for imposition of new RDs and Additional Customs Duties (ACDs) on the items on which ban was lifted recently.

In pursuance to the decision of the Cabinet, Revenue Division issued two SROs both dated 22nd August 2022 with effect from 22nd day of August 2022, whereby, new RDs and ACDs, respectively, have been imposed on the previously banned items. These new items of RDs and ACDs have become applicable, w.e.f., 22nd day of August 2022, ie, Goods Declaration (GDs) that are filed on and after 22nd August 2022 shall be subject to these new SROs.

Now this ministry is being approached by various business concerns that they have not been able to clear their consignments in accordance with the above-mentioned OM(s) of MOC because the new rates of RDs and ACDs have also been added into the system (WeBOC) besides surcharge; hence, facing double penalty. Therefore, they have requested that the stuck consignments which landed at any port before the issuance of SRO 1562(1)12022 dated 19th August 2022 may be cleared as per the instructions and rate of surcharge contained in the Ministry of Commerce’s above-mentioned OMs.

The Ministry of Commerce supports the contention of trade bodies and importers because it was understood that the stuck consignments at ports shall be released subject to payment of penalty/surcharge, and the new imports – imports through B/Ls issued on or after 19th August 2022 – shall be subject to new rates of RDs and ACDs.

The ECC also approved Rs10 billion to the National Disaster Management Authority (NDMA) for procurement and logistics of relief items for flood victims with a direction to the Finance Division to immediately release Rs5 billion to the NDMA.

The NDMA had moved a summary to the ECC while pleading that Pakistan is facing one of the worst climate-induced calamities in the form of floods 2022. Thirty-three million people have been affected across Pakistan, 1,507 have died, 12,759 are injured, and 1,796,919 houses have been damaged.

Sindh and Balochistan have been the worst hit.

In order to provide immediate relief to the flood victims, the NDMA started procurement on an emergency basis. As per immediate requirement, 29,900 tents, 1,389,000 mosquito nets, 82,400 food packs, 235 de-watering pumps, 12,000 water jerry cans, and 45 life-saving boats were procured and distributed amongst the flood victims across Pakistan. The total cost for already procured and delivered items stands at Rs2.40 billion.

Due to colossal damages, already procured items are not sufficient viz-a viz relief requirement in the flood affected areas. Therefore, the NDMA has placed orders for 278,600 tents, 610,000 mosquito nets, 2000 food packs and 50 de-watering pumps at cumulative cost of Rs7.113 billion which are being procured in emergency to minimise loss of lives, property, livestock and crops. The NDMA was allocated Rs8.00 billion in total for procurement and logistics cost of relief items to the flood victims. However, so far the committed cost of only procurement has surpassed Rs.9.5 billion.

Besides procurement, NDMA is also undertaking logistics of all relief goods and materials provided by friendly countries and donations from various organizations. Estimated logistics cost is Rs5.3 billion which also includes ground handling of flights, cargo ships/ trains. Besides, ex-gratia assistance@ Rs1 million is also being paid to the next of kins (NoKs) of the deceased. Foregoing in view and requirement on account of immediate future procurement of relief items, an amount of Rs10 billion may be allocated to NDMA into NDMF.

Ministry of National Health Services, Regulations and Coordination presented a summary for exemption of Active Pharmaceutical Ingredients (APIs) from Customs Duty and Additional Customs Duty. The ECC after discussion directed Ministry of National Health Services, Regulations and Coordination to withdraw the summary and submit a fresh summary on paracetamol and to rationalize the price and ensure its availability.

Ministry of National Food Security and Research presented a summary on import of wheat through Gwadar seaport. The ECC deferred the summary.

Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Khurram Dastgir Khan, Federal Minister for National Health Services, Regulations and Coordination Abdul Qadir Patel, Minister of State for Finance and Revenue Dr Aisha Ghous Pasha, Coordinator to the PM on Economy Bilal Azhar Kayani, Chairman NDMA, Chairman FBR, federal secretaries, and senior officers attended the meeting.

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