The Sindh High Court in a ruling today has declared the recent Statutory Regulatory Orders (SRO) issued by Federal Board of Revenue on import of certain items as null and void.
The Government had made the move to impose an SRO after alarm bells rose regarding the widening of trade and current account deficits. The changes that were made to the Regulatory Duty were expected to generate more than PKR 20 – 25 billion for the government.
Federal Bureau of Revenue released a revised levy of regulatory duty titled “S.R.O. 1035(I)/2017” on 17th of October, 2017 for a revised schedule of government charges on imports. FBR added some 356 new items in the list whereby regulatory duty would be imposed on the said items between 2 percent to 80 percent effective October 16, 2017.
Analysts had anticipated during the time the new SRO was imposed, that though the decision is being taken by the end of fiscal year, correct volume and value would be determined whether the import has curtailed or it will increase the inflows from grey channel.
Pakistan Steel Millers Association (PSMA), Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM), Chairman Pakistan Chemicals & Dyes Merchants Association (PCDMA) and Pakistan Chemical Manufacturers Association (PCMA) had all called for reversal on the additional Regulatory Duty voicing their concerns regarding the impact it would have on exports.
According to analysts, the impact of the anticipated decline vis-à-vis imports was negligible, since the SRO did not target any major import items. They are of the opinion that the annulment of said SRO will yield no results towards fixing the Fiscal and Current Account Deficit.
Furthermore, as the said duty had a significant impact on majority of food items the removal may prompt a slowdown in inflation.
Sindh High Court suspended the judgement for 30 days, “in order to enable any aggrieved person to avail a remedy of the appeal. During the period of 30 days, the Statutory Regulatory Order dated 26th October, 2017 shall continue to operate.