Thursday, June 13, 2013 - Karachi—Tea traders are learnt to have urged the government to exempt sales tax on the import of black tea in the new budget to curb the commodity’s smuggling. Pakistan Tea Association (PTA) submitted a set of proposals to the government for incorporation in the new budget document, which proposed to the federal government to enforce a quantitative restriction on the import of tea via Afghan Transit Trade.
They insisted that 15,000 ton of ‘Green and Black Tea’ was being imported through Afghan Transit Trade (ATT), saying that green tea was the foremost beverage served in Afghanistan. “Therefore, a quantitative restriction will be more than sufficient for them”. Members of the tea association also advised the federal finance minister to levy and collect the same amount of CD/ST/IT from Afghan importers at entry point in Karachi and passing it on to Afghan government.
“This practice is in vogue in various landlocked countries.” In a letter sent to the prime minister, federal finance minister and FBR, tea traders called for declaring tea a zero-rated item, freeing it from the Sales Tax regime for at least a year to discourage smuggling and protect government revenue. The letter said that as much as 240,000 tons of tea was consumed in Pakistan, more than half of which was smuggled into the country via the Afghan Transit Trade. This practice, they said, was being encouraged because of “poor physical controls by customs and substantial high incentive to evade import duty and Sales Tax”. Chairman of Pakistan Tea Association Hamid S Khwaja said that the outgoing government in the last budget in June last year had reduced Sales Tax from 16 percent to 5 percent, besides imposing stiffer checks and control.
Source:-pakobserver.net
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