Steel industry demands ban on import via land route

ISLAMABAD: The steel industry has requested the government to only allow steel import via the seaports, and ban steel import through the land route, as smuggling of the metal continues from Iran and Afghanistan under the garb of some certain rules/SROs.

According to the Pakistan Association of Large Steel Procurers (PALSP), Iran does not allow export of meltable or re-rollable scrap, and only ‘prime material’ was exported without any proof of payment through banking channels.

“This practice amounts to money laundering and illegal exports of currency. This is dangerous in view of the Financial Action Task Force (FATF) Regime that Pakistan is struggling to comply with,” the PALSP said.

The association has also informed the Senate Standing Committee for Commerce, Textile and Industry, which is going to take up the matter in its meeting today (Tuesday), that the unlawful practice of bringing steel bars/steel girders/channel from Iran and suppression of quantity per trailer and miss declaration of goods declaration (GDs) have resulted in incalculable loss to the local, revenue generating steel industry.

The association has written a letter to Prime Minister Imran Khan, PM’s Adviser on Industries, Textile and Investments Razzak Dawood, Federal Board of Revenue (FBR) Chairman Shabbar Zaidi, and Senate Standing Committee for Commerce, Textile and Industry Chairman Senator Mirza Muhammad Afridi.

They informed that Pakistani markets were being flooded with the import of brand new/Prime Steel from Iran under the garb of re-rollable scrap, through Baluchistan.

PALSP as well as other Steel Melters Association and Pakistan Ship Breakers Association have been appealing to the government to halt this practice of abuse of rules/SROs that was destroying the local steel industry.

The FBR has recently taken steps for curbing illegal trade and smuggling from Afghan and Iranian borders, which was welcomed by the industry. But, the industry has also demanded a complete ban on the import from the land routes.

“In order to curb this menace, we strongly recommend that all steel items should (be) allowed to be imported from Iran/Afghanistan through sea ports only. This will curb the menace of distorting the market prices and provide level playing field to the steel sector and document all payments through banking channels,” the letter said.

At the time of Budget 2018-19, re-rollable scrap PCT 7204-4910 was by mistake inserted in schedule 1. It should be reverted back to Custom Duty, it demanded.

Also, regulatory duty (RD) on re-rollable scrap was only five percent, whereas the total duty on its competitive and like product, billets, was 28 percent. Keeping in view the very low price of imported re-rollable scrap, it was suggested that RD on re-rollable Scrap should be increased from five percent to 35 percent to bring it in parity with the steel billets and ship plates.

By doing this, government revenue would increase. This would also provide a level playing field in the steel sector, the association suggested.