Ministry of communications proposes remedial measures

From YOUSAF RAFIQ
Special Correspondent, Islamabad
Apr 03 - 09, 2000

There is a felt need to put in place an effective mechanism to ensure timely and expeditious clearance of consignments from the ports. Inability to put to productive use goods imported into the country is a great loss to the economy. The matter has been a source of concern for this ministry and has also engaged the attention of the ECC. Past ECC decisions on the subject have not yet yielded results (Annexure- 1&2). It is necessary for all concerned, importers, ports and CBR/ Customs, to play an effective role in this regard and to appreciate that a departure from the present approach and methods is required. There is also need for widespread realisation of the cost to the economy from delays in taking timely actions and in decision making.

According to the details gathered by this scribe, there are in all rights consignments belonging to government organizations lying at the PQA, of which seven are over three years old and one over one year old. No private sector consignment is held up at PQA. Total storage charges accumulated on the consignment lying at the 2 ports is Rs. 2.1 billion with Rs. 1.34 billion pertaining to goods at KPT ( Rs. 1.1 billion on account of private cargo & Rs. 252 million on Government cargo) and Rs. 764 million on goods at PQA. The above amount exclude payments to be made by WAPDA, KESC and Pakistan Steel.

In the case of private sector, consignment have remained uncleared at the port largely because importers appeal initial assessment of duties. As the process of their disposal is lengthy, substantial storage charges accumulate by time the appeal is decided. There, thus, remains no incentive for the importer to have goods released. In the case of public sector consignment, very often project PCIs do not provide for custom duty and for freight expenses with in the country. Consignment thus remain held up as departments initially seek duty exemption and if their request is not accepted, supplementary grant from finance Division.

The only way to prevent continuation of the current situation on the ports is to completely review governmentís facilitation process. A definite time period for final decision on appeals cases needs to be stipulated. More importantly, incentive for the importers to appeal needs to be reduced by a system where these are accepted on exceptional basis with out subsequent review. It may also be necessary for powers to be delegated to the field level so that the first assessment of duties is final in most cases. Safeguards may be ensured in implementation to preclude repeated intervention by all the courts.

On their part, the Karachi Port Trust and PQA which incur substantial capital expense in providing storage facilities and handling equipment alongwith meeting recurring expenses for security and for shifting of goods from shore to sheds has cooperated with the importers to the maximum extent possible. In March 1999 KPT allowed WAPDA to lift 52 consignments with accumulated storage of Rs. 1.5 billion to be settled on deferred payment basis over the period of about three years. Similarly, 29 consignments belonging to KESC with accumulated charges of almost Rs. 1 billion were released by KPT on deferred payment basis. PQA allowed Pakistan steel to lift their consignment on deferred payments basis. It is to be mentioned here that storage charges are a significant source of revenue for the ports which are self-financing organizations and whose continued financial substantially is crucial for the economy.

The Ministry of Communications has proposed following measures to clear the ports of the consignments lying there and to prevent continuation of the practice. First, as per Government rules on the subject, CBR jointly with concerned Port authorities may immediately begin auction of uncleared private sector consignment lying at the port for more than, say, six months. The proceeds be shared equally between the relevant port and the CBR, in the case of the port and the CBR in the case of the ports to the extent of the charges due.

Second, consignment pertaining to Government organization may be lifted by them with in a month either on payment of storage dues or on production of undertaking duly endorsed by the Ministry of Finance that the payments would be deducted at source. In case these organizations even then do not lift their cargo the same be auctioned by CBR jointly with concerned authorities.

Third, Finance Division, where possible may deduct at source amount due to the ports on account of the consignments allowed to be lifted on deferred payment basis and remit the same to the concerned authorities.

Fourth, Revenue Division may review the process for assessment of duties and processing of appeals cases with the objective of expeditious and speedy clearance of cargo. In case No. 24/03/99 dated 25-2-99 ECC had decided that CBR may decide all appeals and representation within two weeks.

CBR has expressed the view that delay in clearence of consignment by importers are a source of revenue to KPT. That in most cases assessment of duties are made timely. The Custom Department has taken measures to ensure speedy clearance of imports including introduction of fast track clearance. That all effort are taken to decide appeals as early as possible; though delays may take place in the interest of justice. It is submitted that KPTís objective in line with its mandate role is to provide service at minimum cost to users. They prefer speedy clearance of goods with quicker turnover. Reforms in customs procedures are welcome. The economy would certainly benefit through actual results on the ground. Slow facilitation act as a distinctive for investment in modren port equipment as the reduce the benefits of faster handling.