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Port rejects FBR suggestion to relax demurrage; PM asked to intervene

Port rejects FBR suggestion to relax demurrage; PM asked to intervene

The Friends of Business & Economic Reforms has blasted the terminal authorities at Karachi Seaport for rejecting the recommendations of the FBR to extend the free period of 15 days at terminals for charging demurrage, in line with the lockdown extension in the country, appealing the prime minister to intervene and pass directives in this regard.

In a letter written to PM Imran Khan, FEBR President Kashif Anwar stated that at a time when federal as well as the provincial governments are endeavoring to facilitate the business community on account of the lockdown the terminal authorities at ports have flatly refused the proposals of Revenue Division, Government of Pakistan (FBR) which is sheer violation of the PM’s directives to facilitate the businesses. “The authorities’ target is just profit and revenue generation even in the time of worldwide pandemic and grave financial crisis. “The each and every department all around the country are struggling to provide maximum facilities to the industry but the terminal authorities is not ready to cooperate in this regard and this matter should be brought to the notice of Prime Minister of Pakistan.” Kashif Anwar stated that in order to cope with the challenges of prevailing worldwide pandemic COVID-19 it is very encouraging that different Ministries are continuously announcing various relief packages for export sectors and other local industries in the form of reduction in interest rate, concession, rebates, subsidies, suspension of taxes and extensions in the date of filing of Tax Returns etc.

“We want to bring in your kind notice that in the absence of feasible economic conditions, the liquidity situation of businesses have badly disturbed. It is impossible for commercial and industrial importers to bear further financial losses and pay exorbitant detention and demurrage charges. Keeping in view of the further lockdown government can be the only facilitator for the business community to help them in curtailing their losses in these hard times. We request you, on behalf of the whole business community, to intervene and direct the concerned federal ministries to ask shipping lines not to charge detention, forcing terminal authorities not to charge demurrage from the importers for a period of 15 days in addition to the free time allowed by the shipping lines and port authorities.”

Kashif Anwar stated that local industry is backbone of our economy besides agriculture, majority of the raw materials consumed by the local industry are not produced locally and local manufacturers in order to run their industries smoothly have to depend upon imported materials. He said that many local industries have to close down their business activities during the fight against terrorism, non-availability of raw materials, devaluation, high input cost of utilities, flight of capital from country and many other impediments faced by local industry. “We should not forget that commercial importers dealt in the trade of raw materials, tools and accessories played a vital role in fulfilling the needs of the local industries and their survival.”

He said that currently, majority of the businesses related to import either industrial or commercial are facing severe financial losses, revenue shortfall due to stoppage of trading in local markets, closure of local industries except some which are exempted related to food and medicine, non-availability of cash flows, high markup rates by banks, closing of clearing agents offices, restriction of movement of people/vehicles, problem in filing goods declaration of imported consignments and were not in position to clear their consignments due to which they have to pay heavy demurrages at ports and huge detention charges of shipping lines in dollars. “We also request the government to collect half the duties and taxes of import stage at the time of clearance and defer half the duty and taxes of import stage for three months against postdated cheques.”

The letter was also separately sent to Minister of Maritime Affairs Syed Ali Haider Zaidi and Advisor to PM on Commerce and Textile Industry Abdul Razak Dawood, seeking special relief for industrial and commercial importers in respect of demurrage, detention, payment of duty and taxes at ports.