Duty cuts, ST zero rating must to boost sports: Sibtain

KARACHI: Heavy import duty on sports equipment is one of the basic impediments in the promotion of sports in Pakistan.

It has crippled sports standard because the sports stakeholders and players find it extremely difficult to import any equipment themselves or purchase from importers at an affordable price.

Some federations can get equipment free of cost from international federations or sponsors but they don’t do that because of the high import duties.

Sports goods that attract 10 percent customs duty are: covers of inflatable balls, football cover, football bladder, volleyball cover, basketball cover, netball cover, handball cover, rugby ball cover, , bladders, fishing rods, fish-hooks, line fishing tackle, fish landing nets, butterfly nets, decoy “birds”, fishing reels as well as gear of skiing, rowing, golf, gymnastics, athletics.

The items on which 20 percent customs duty is charged are: cricket pads, cricket sets, hockey sticks, polo sticks, lawn tennis balls, inflatable footballs, cricket balls, hockey balls, polo balls, squash balls,  tennis balls, table tennis balls, punching balls, badminton shuttle cocks, volleyballs, basket balls, netballs, handballs and rugby balls and equipment for table tennis.

Lawn tennis, badminton and squash rackets are released after receiving 25 percent in customs duty.

The federal government had been granting exemptions under section 19 of the Customs Act 1969 and under section 13 of the Sales Tax Act 1990 by notification in the official gazette on sports equipment from the whole of the customs duties and sales tax chargeable thereon.

This policy or practice had been ameliorating to some extent the situation created by the prohibitive market price of imported equipment charged at 10, 20 and 25 percent customs duty plus sales tax. But discretion of FBR to grant exemption through notification was withdrawn under Finance Act 2015 which adversely affected sports.

SM Sibtain, former secretary at Federal Tax Ombudsman Secretariat and current Pakistan Table Tennis Federation (PTTF) president, has proposed while supporting the policy of withdrawal of exemptions across the board that the rate of customs duty on commercial import of all sports equipment should be reduced to 5 percent in PCT Code.  Likewise, he pleads for reduction of sales tax on commercial import of all sports equipment to 5 percent under Sales Tax Act.

He says customs duty and sales tax on import of sports equipment received by federations free of cost from international or continental federations under various development programmes and from internationally approved equipment manufactures on sponsorship for specific sports events should be zero rated.

“The rate of Customs Duty on import of sports equipment against LC for preparing teams by federations to be used at the international competitions may be charged at 5 percent but sales tax may be reduced to zero because it is not meant for sale but to cater to the needs of registered players at cost,” Sibtain told ‘The News’ on Thursday.