Withdrawal of regulatory duty on skimmed milk urged

Withdrawal of regulatory duty on skimmed milk urged

By our correspondent

KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has demanded the Customs authorities to withdraw regulatory duty on skimmed milk, as it is essential and non-luxury item and used as a raw material for producing several food products.

The KCCI in a letter sent to Zahid Khokhar, Member Customs, urged to withdraw the regulatory duty on import of many household items, especially fat-filled milk powder. The government through a SRO dated October 16, 2017 imposed regulatory duty on around 731 items in order to restrict imports of unnecessary and luxury items to reduce the quantum of import bill.

The KCCI said although the step to impose regulatory duty has been taken to plug the rapid decline in foreign exchange reserves, the imposition of regulatory duty on household items like fat-filled milk powder would prove to be counterproductive.

“The imposition of regulatory duty on such items will increase the prices of this essential commodity, promote smuggling and may also create shortage of the product being largely used in almost every household,” the KCCI said.

It said the regulatory duty in the range of 10 percent to 50 percent has been imposed on a wide range of products, including essential food items used by an average consumer or by domestic industry as raw material for producing various consumer products, FMCG and exportable items, which would not only escalate prices of many products being supplied to the local markets, but will also make Pakistan’s exports uncompetitive due to additional costs.

Referring to the stance of the Federal Board of Revenue (FBR) that the levy of regulatory duty would not affect the common man, the chamber said the imposition of regulatory duty on fat-filled milk powder is contrary to the argument, as this product is a basic necessity of the masses.

“Fat-filled milk powder was already subject to 21 percent Customs duty, whereas 20 percent regulatory duty has also been imposed on this essential product, which will obviously affect the common man,” it added.

Meanwhile, duty-free imports have been allowed for fat-filled milk powder being imported from Malaysia under the free trade agreement (FTA), which will create imbalance in the local market, as traders are importing this product from other countries on the payment of all the duties along with the regulatory duty, making their imports uncompetitive in the market, the Karachi Chamber of Commerce and Industry said.

The chamber urged the Member Customs to ensure a level-playing field to all the relevant importers of fat-filled milk powder by withdrawing the regulatory duty to avoid adverse impact on consumer prices and discourage smuggling.