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
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.