Chinese embassy in Islamabad reported figures on Pakistani imports over the past two decades have a yawning difference with the data reported by the local institutions. PHOTO: FILE
ISLAMABAD: It has finally happened and hopefully it would trigger a new era in the business community’s victory over smugglers on the Pakistan-China highway.
The 5th meeting of the 2nd phase of negotiations for China-Pakistan Free Trade Agreement (FTA) was held in Islamabad on August 3-5. Tax reduction, exchange of customs data, quarantine measures along with inspection against some products imported from Pakistan was negotiated.
Hopefully, the next round would be on exchange of data on imports into Pakistan. This data will help the litigants in Pakistan before the National Tariff Commission to prove the actual over-imports from China that are damaging the local industry.
This cannot be accomplished without proving that excess amounts of products are being imported and resultantly, damaging the industry.
Read: Pakistan wants zero tariff on 70% items
For instance, the best Pakistani seamless pipe producers have been forced to operate under capacity levels not by their competitors but by importers, whose consignments could fall under the category of smuggling if it is proven that they commit dumping.
Anti-dumping laws in Pakistan are strict enough to discourage such smuggling, but winning cases of dumping claims is difficult without official data on imports.
So far, the Chinese and Pakistani customs data cannot be reconciled. That is because of under-declaration both in quantities and prices.
Such under-declaration is committed with the help of customs staff, to steel duties and taxes on consignments from foreign lands.
Countries with which Pakistan shares its customs data could help reveal cases of under or mis-declaration. With China, Pakistan is yet to start such sharing and reconciliation.
Experts and customs operators, who know this situation, view the present Pak-China trade as the most suspect part of the world trade.
Under-invoicing is rife with regards to stealing duties and taxes, while the immediate reconciliation of data on consignments between China and Pakistan is impossible because of a lack in exchange of data.
They find the lack of main-framing of Pak-China trade as the real source of Pakistani industry’s collapse. Some of them even say that foreign investment is discouraged by this menace in Pakistan. And this menace is impossible to remove without exchange of data.
Ironically, the NTC has never asked for data reconciliation. No other institution in Pakistan can be motivated to ask for it, as it is the NTC where officials receive and hear numerous complaints against Chinese exports to Pakistan’s under-invoicing.
The difference in data is so grave that the Chinese embassy in Islamabad reported figures on Pakistani imports from China over the past two decades that have a yawning difference with the data reported by the Pakistani institutions.
The big question
Can the two countries take steps fast enough to protect Pakistani industry from total collapse?
Can they remove the curse of data discrepancy?
One answer to this from the knowing quarters is that the Pakistan customs makes a lot of dirty money from under-invoicing; therefore it might not initiate a fast-track reconciliation process.
I know certain businessmen who have met Finance Minister Ishaq Dar, Minister for Planning and Development Ahsan Iqbal and even the Prime Minister. Even the high-ups could not get the anti-dumping authorities to quicken the process of getting the anti-dumping modules for data reconciliation.
Read: FTA with China: Pakistan offers to scrap duties on 50% of products
If the customs authorities are shy of such reconciliation modules, no power in Pakistan can force them to behave in a decent manner. Businessmen are forced to run from pillar to post in search of justice without success.
The writer has worked with major newspapers and specialises in analysis of public finance and geo-economics of terrorism
Published in The Express Tribune, September 21st, 2015.
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Read more: Pak-china trade , Under-invoicing
KARACHI: Pakistan Customs has detected mass under-invoicing on goods imported from India and an exercise to recover evaded revenue has been initiated.
According to details, in November 2015 Appraising Officers Ameer Nasir Ali and Hamood-ur-Rehman approached then Collector MCC Appraisement East Majid Yousafani reporting that goods imported from India were being largely under-invoiced and mentioned the official website of Indian government, which is a commercial portal of Central Board of Excise & Customs India.
This portal records all the details of exports and imports, when certain goods declaration and shipping bill numbers thereof were checked at www.icegate.gov.in, it was found that the values declared by the importers before Pakistan Customs were way too less than the values declared at the time of export before Indian Customs.
Subsequently, Majid Yousafani assigned two Additional Collectors Haris Ansari and Irfan Wahid to scrutinize the import data of goods from India to ascertain whether there was any revenue recoverable.
Additional Collectors in their report confirmed that mass under-invoicing was being carried on the goods imported from India. Majid Yousafani issued an Assessment Alert advising all field formations to consult the Indian website while making assessment a well as he wrote to Director Customs Valuation to revise the values of goods.
The then Director Customs Valuation Manzoor Memon, Additional Director Iqbal Munir and Principal Appraiser Hafiz Mohammad Jokhio after due deliberations revised the customs values of several goods imported from India in line with the values available at www.icegate.gov.in. Moreover, values of goods coming from Dubai were also revised because most of Indian origin goods come to Pakistan via Dubai.
Collector MCC Appraisement East Ashad Jawwad is continuing this revenue recovery campaign and because of this exercise several cases have been established and MCC Appraisement East alone have served around 20 contravention for adjudication creating demand of hundreds of millions of rupees, which was evaded through this scam.
It may be mentioned here that goods imported from India and are being under-invoiced include fabric, lubricants, jewelry etc.
It is worth mentioning here that Collector Adjudication Chaudry Mohammad Jawaid spared all the opportunity to the fabric importers in six cases to prove their claim that the values mentioned by www.icegate.gov.in were not correct and the exporters in India over-invoiced the exports in order to claim 17 percent export rebate. However, none of the importers submitted any evidence of the payment made to Indian exporters, which could verify their claim. Collector Adjudication has imposed fines and penalty on six different fabric importers.
Directorate of Post Clearance Audit (PCA) Karachi has served contravention on a number of traders importing tyre and tube from India for evading government’s legitimate revenue to the tune of Rs350 million through under-invoicing.
Scrutiny of import data of several traders, conducted by Director PCA Gul Rehman, revealed that they had imported declared to be “tyres and tubes, with or without flaps of different brands” of Indian origin, under different sub heads of PCT heading 4011 through different collectorates.
In these cases, the assessment has been made as per Valuation Ruling applicable at the time of import. However, in pursuance of information that the group under invoicing is being carried out, the matter was investigated taking into consideration the official website www.icegate.gov.in e-commerce portal central board of excise and customs.