KARACHI: Directorate General Transit Trade (DGTT) reportedly agreed to withdraw its mandatory requirement of depositing 0.25 percent premium of duty and taxes to obtain insurance guarantee against goods declarations (GD) of transit cargos.
The decision was made at a meeting held at DGTT here on Tuesday. The meeting was attended by the representatives of all major insurance companies and office-bearers of customs clearing agents associations.
All Pakistan Customs Agents Association (APCAA) confirmed that DGTT had agreed to withdraw its mandatory requirement of depositing 0.25 per cent premium of duty and taxes to obtain insurance guarantee against GDs of transit cargos. DGTT was also consentaneous to develop a module in WeBOC system for online verification of insurance guarantee in order to avoid the submission of fake guarantees.
During the meeting, it has also been conveyed to the DGTT that fixation of 0.25 per cent premium was not in its ambit but Sindh Revenue Board (SRB) has authorized to fix the minimum tax rate for the collection of sales tax on services on insurance premium like valuation rulings, which only described customs values to collect customs duty and the transaction value for insurance premium should only be fixed with mutual consensus by traders and insurance companies.
The APCAA officials termed the requirement to deposit premium in shape of pay order @ 0.25 percent of duty and taxes involved with the insurance companies for obtaining insurance guarantee against a particular GD as impractical, saying that customs agents before the issuance of said office order used to deposit certain amount to insurance companies in advance, which were credited or debited as per insurance guarantee; adding that it was practically impossible for the clearing agents to arrange hundreds of pay orders on daily basis to fulfill the said requirement, creating problems not only for customs agents but bankers as well.
They said that DGTT in October 2019 declared depositing of 0.25 percent premium of duty and taxes mandatory to obtain insurance guarantee against GDs of transit cargos. After the issuance of said office order, clearing agents, who were transacting business on behalf of Afghan traders, were required to submit pay order of premium, original premium payment receipt and insurance policy on the prescribed format on bond paper containing details of sum insured, premium rate and premium amount to obtain insurance guarantee against a particular GDs.
Consequently, APCAA took a strong stance against this office order, which was not only creating additional financial burden on the trade but also making the procedure more cumbersome.