950808

CBR not fully satisfied

with PSI firms, requires

report within 24 hours

IKRAMUL HAQ

ISLAMABAD: The CBR is not fully satisfied with the preshipment operations of the two foreign firms SGC and Contecna but has noticed some visible improvements, observed and official of the finance ministry on condition of anonymity.

On factor for dissatisfaction was the delays in the PSI reports which add to the cost on account of demurrage to be paid by the traders.

The CBR has directed the two companies that PSI reports should arrive within 24 hours, much before the goods arrive so that the traders do not have to incur any demurrage. With progress in technology reports are transmitted all over the globe in no time.

There are other common complaints of under invoicing and overvaluation. To resolve them two committees are already working. One is working committee comprising representatives of Karachi Chamber of Commerce and Industry, and representatives of the two companies, with Deputy Collector of Customs Karachi, as its head. The other is Steering Committee including representatives of the federation and representatives of the pre-inspection companies with Collector Customs Karachi as its head.

The two committees have been sorting out the problems. It is expected the steering committee will hold final meeting on August 15.

Officials expect that issues will crystallise by them and will be referred to Islamabad.

Sources stated that visible improvement in operations is endorsed by the fact that there are smaller number of complaints now and that intervention by the CBR is not that frequent as it was earlier. Interventions were in regard to complaints of valuation and under invoicing.

The CBR, it is learnt, is undertaking an objective study as to the causes of complaints and their nature. One assessment is 80 percent of the trade is now free of such complaints, while the remaining 20 percent of the trade is subject of complaints.

Here too complaints arise in regard to these items whose price is voltile, subject to sudden changes. In such cases, the price in te contract, PSI valuation and Custom valuation vary considerably leading to bitter controversy. The price in the contract is the one when the deal was struck The PSI valuation which comes after a few weeks is different. Under law, the price on that day has to be taken as PSI value.

Similarly, when the consignment reaches the port of destination, the price in the bill of entry has to be the price prevailing on that day. Thus mischief arises with three different sets of prices.

Sources admitted that a major cause of complaints is to get rid of the system somehow. The society is reeking with corruption. Who wants to pay tax or dues to the government, the trade and officials not withstanding. The PSI system was meant to overcome their collusion The situation called for the induction of pre inspection system which is prevalent in many countries as a sure means to boost customs revenues

In Pakistan, the preshipment inspection is being tried for te second time. In the past, the traders and the official shared a common interest to make a mess of it, and they succeeded. But the government thought it better to reintroduce the system, in order to increase the revenues as has been done in several other countries.

Asked if revenues have gone up, the official said that receipt are getting better, but actual gain have not been quantified.

A lacuna in the agreement has been noticed that while the government agreed to give a certain percentage of commission on the value of goods inspected, thhere was no commitment from the companies about the increase in revenues to the government. Initially the issue was raised during negotiations but was not followed through.

A negative element is in respect of duty free items like wheat and fertilizer and now cotton. While the government pays pre-inspection fee but does not earn any revenues.

The source added that under invoicing is not particular to Pakistani traders but is common in other countries too. Some firms in Korea are reported to be notorious, despite the fact that the country adopted the pre-inspection system ten year ago.