Revenue body to withdraw regulatory duty on raw material

The Federal Board of Revenue (FBR) will withdraw regulatory duty on various raw materials, which are used by local manufacturers and export sector. During a meeting with members of the Karachi Chamber of Commerce and Industry (KCCI) on Tuesday, FBR Chairman Tariq Mahmood Pasha said that the revenue body is reviewing the list for providing exemption to those raw materials used by manufacturers and the export sector. The list will be released soon, he added.

He admitted analytical errors in SRO 1035 (I)/2017 issued on October 16, 2017 for imposition of regulatory duty on 731 items. Around 411 items were already subject to regulatory duty and the list contained some more items to bring under the ambit of the regulatory duty, he said.

Pasha said that the prime objective to impose regulatory duty was to improve the country’s balance of payment by discouraging rising import of items, including non-essential and luxury, besides those raw materials, which are manufactured locally. He assured the business community that the imposition of regulatory duty is not meant for revenue generation. Such measures resulted in export growth during the last few months, the FBR chairman said.

“We are in the process to bring correction in SR related to regulatory duty,” he added. The business community apprised the chairman of the overnight implementation of the regulatory duty, which resulted in difficulties for importers who booked shipments in advance. The businessmen also apprised the FBR chairman that the imposition of regulatory duty would badly impact the retail side and it would have inflationary pressure in the near future. They urged the Federal Board of Revenue chairman to find other avenues to discourage imports such as amending the existing free trade agreements and preferential trade agreements.