Sales tax collection on imports plunges to Rs61bln in August

KARACHI: Sales tax collection on imported goods plunged 11 percent year-on-year to Rs61 billion in August as torrential rains exacerbated weak infrastructure systems to keep economic activities muted during most parts of the month, official data showed on Tuesday.

The collection of sales tax at the import stage fell from Rs69 billion in the same month of the last year.

The sources said torrential rains hampered customs clearance of foreign trade cargoes during the last week of August. Then, the port activities remained limited due to holidays on account of Muharram.

Outage of telecommunication and internet services due to floods and thunder showers in the city also adversely affected the filing of goods declaration (GD).

An official of Pakistan Customs said phone and internet services have become an integral part of foreign trade clearance following the implementation of online GD filing.

Operations at ports were mostly suspended after record monsoon showers ripped off infrastructure that was already rundown. Terminals at both Karachi Port and Port Qasim are flooded with rain water and there has been no container grounding and processing. Transportation of goods from ports to markets and upcountry remained suspended as roads were waterlogged with outdated sewerage systems full to the brim.

Sales tax collection on the import stage during the first two months of the current fiscal year remained flat at Rs128.7 billion compared with Rs128.26 billion the same period last fiscal year.

The sources said the lower collection in August brought down the average collection in the first two months of the current fiscal year.

Large Taxpayers Unit, Karachi has jurisdiction over sales tax collected by customs stations at sea ports in the city.

According to the details, Model Customs Collectorate (MCC) Port Muhammad Bin Qasim made major collection of Rs56.6 billion during July – August, which was four percent lower than Rs58.8 billion the same period a year earlier.

MCC Appraisement East registered 5 percent growth in sales tax collection to Rs39 billion in the first two months of the current fiscal year. That was compared with Rs37.2 billion in the corresponding months of the last year.

MCC Appraisement West posted 23 percent growth in sales tax collection to Rs20.5 billion. That was compared with Rs16.6 billion during the comparative period.

However, MCC Jinnah International Airport recorded an 18 percent decline in sales tax collection as bad weather also affected the flight operations.

The sources said during upcoming months the collection of sales tax on imported goods would increase as lockdown associated with coronavirus has been lifted.

The government had imposed lockdown in late March, causing shutdown of industrial activities.