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 1. INTERNATIONAL   2. INDUSTRY
 3. FINANCE  4. POLICY
 5. TRADE  6. GULF

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TRADE

May 20 -June 02, 2002

MEDICINES WORTH RS400M LYING AT PORT

Large consignments of imported drugs and medicines worth over Rs400 million have been lying at the port for last two months over a dispute of payment of 15 per cent general sales tax. As a result of this many medicines are running in short supply in the local market.

Over three dozen containers loaded with life saving drugs and other medicines, not manufactured locally, are awaiting customs clearance because the importers of these drugs and medicines are reluctant to pay 15 per cent GST.

These consignments mostly belong to those importers who had opened letters of credit (LCs) and executed their shipments prior to the levy of 15 per cent GST on medicines and drugs on March 21, 2002.

Importers apprehend that if they meet the demand of the customs authorities and pay the disputed 15 per cent GST this will result in heavy losses as they had already made advance sale of these medicines at the old rates and prior to arrival of these consignments.

"I had established my L/C much prior to the levy of disputed 15 per cent sales tax on medicines and as a normal practice I had also made advance sale of the booked consignments without taking into account the impact of sales tax," a leading drug importer told.

"Now, if I pay sales tax at import stage who will ensure that the amount paid on this account will be refunded to my buyer, who had already finalized the deal without taking into account the impact of 15 per cent GST," he asserted.

Dr. Mushtaq Noorwala, vice-chairman, Pakistan Chemists and Druggists Association (PCDA), told on Monday that his association has also taken up the issue with the government and hoped some positive results will come out. However, he was highly critical about the role of the bureaucracy and said long delay in resolving the issue might have deteriorated the quality of such a sensitive cargo like medicines and drugs.

TV INDUSTRY FEARS LOSING RS3BN INVESTMENT

The local television industry is up in arms against a possible government move to include television import at zero rate duty in the Afghan Transit Trade (ATT) agreement , fearing over Rs3 billion investment wipe-off and unemployment of over 4,000 employees.

Pakistan and Afghanistan are engaged in fresh negotiations to hammer out a new transit trade agreement under which a majority of the items de-listed earlier are to be included back. Commerce Minister Abdul Razak Dawood is due to visit Kabul later this month to give a final shape to the agreement.

"The local industry will collapse, if these two negative developments take place," Chairman, Pakistan Electronics Manufacturers Association (PEMA), Sarfarazuddin, informed commerce minister Razak Dawood few days back.

Domestic TV assemblers 10 in all fear a fresh wave of television sets smuggling into Pakistan from Afghanistan if the new ATT includes television sets import at zero rate.

PRIVATE SECTOR HELP SOUGHT IN PORT PROJECTS

Steps are under way to obtain the cooperation of private sector in development projects of Karachi Port Trust and Port Qasim Authority. This was stated by Communications and Railways Minister Javed Ashraf Qazi while presiding over the communications conference held on Monday. The conference reviewed country-wide communications development projects.

The minister said the implementation of the Shipping Ordinance would be ensured for the development of shipping sector, and Karachi Port was centre of the industrial activity in the country. He said new navigation system had been installed at Port Qasim that would help continue shipping traffic at night.

HIGH PRICE, LOW STOCKS HIT RICE EXPORTS

High domestic prices and depleting stocks kept the rice exports under pressure in the past week and are likely to keep business dull in coming weeks, dealers said on Monday.

They said domestic prices were likely to stay high owing to low stocks available in the market, which had almost stopped the exports.

Traders said lower-than-expected output from the latest crop had raised domestic prices and foreign buyers were not willing to pay high Pakistani export prices.

Pakistan has scaled down its rice output estimate for fiscal 2001-02 (July-June) to four million tons from 4.74 million tons because of irrigation water shortages during the growing season.

The country's annual domestic rice consumption is around 2.3 million tons.

GOVT WILL NOT ALLOW IMPORT OF USED CARS: RAZAK

Commerce Minister Abdul Razak Dawood has declared emphatically of the government's intention of not allowing import of used cars despite the fact that the market is still facing shortage of cars and dealers continue to charge premium.

He made this statement in the 53rd meeting of the Advisory Council of Ministry of Commerce held in Islamabad last week, which was attended by a large number of businessmen from various associations.

EXPORT TO AFGHANISTAN GOES UP

Export to Afghanistan rose by 2.61 per cent to $94.3 million during the July-March period of the current financial year against $91.9 million during the same period last year.

Well-placed sources told that the government expected that exports would pick up in May and June of the current financial year.

EXPORTERS SUFFER DUE TO WRS

The war risk surcharge being charged by the shipping lines from Pakistani exporters after the terror raids on the US soil on September 11 has cost them (exporters) $234 million.