KARACHI: Pakistan Customs on Monday increased valuation of imported steel products by up to 10 percent to raise tax collection – a move that annoyed importers, but pleased local manufacturing industry.
The Directorate of Customs Valuation, in a notice, increased customs value of stainless steel sheets/coils imported from Japan and Europe to $1,300/tonne from $1,212/ton. The authority pushed up valuation of steel products coming from India and China to $1,100 and $1,010 from $1,000 and $948. The import from other regions will now be subject to value of $1,150/tonnes as compared to $1,054/tonne.
The customs department said it took the decision in the wake of rising commodity prices in the international market. It said that the previous valuation ruling was issued more than one year ago and since then prices of stainless steel in international market had shown an upward trend.
“Therefore, the exercise to reconsider customs value was conducted,” it added. Tax officials said the national exchequer would get additional revenue in shape of duty and taxes after the revision in valuation.
Local iron and steel manufacturers are quite satisfied with the decision. They said it would promote local products. “Lower prices of imported goods were discouraging the production and sales of locally manufactured steel,” said an industry official.
Currently, between 500 and 700 steel mills, including furnaces and rolling mills are operating in the country. Pakistan’s steel demand hovers around eight million tonnes as against the production of five to six million tonnes. Imports meet the demand and supply shortfall. The infrastructure developments, led by $56 billion China-Pakistan Economic Corridor projects, are boosting local per capita steel consumption, which is, currently one of the lowest in the world.
Moved by the local industry, government has, a number of time, slapped anti-dumping duties on steel imports from China and other countries. The customs authorities rejected a demand of importers for enhancing discount on import of steel products. Tax officials held meetings with the representatives of All Pakistan Stainless Steel Importers and Traders Association and other importers in the last couple of months.
Importers and traders said the current 15 percent discount of secondary quality of steel is low. Previously, around 40 percent discount on imported steel was granted. Customs department, however, rejected the demand as unfounded.
“Their stance for increase in discount on account of secondary quality from 15 percent to 40 percent was not acceptable being inconsistent with other iron and steel related items of secondary quality and the importers could not provide any tangible ground for their contention,” it said in the notice.