NBR body suggests exemption of 1800 products from PSI list

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Doulot Akter Mala
A committee constituted by the government has recommended withdrawal of mandatory pre-shipment inspection (PSI) system for nearly 1800 products from the next fiscal.
The products include industrial raw materials, capital machinery, sugar, refined soybean and palm oil.
The committee has identified goods under specific categories to be less vulnerable to revenue leakage.
The five-member committee, headed by customs commissioner Mohammad Lutfor Rahman, has submitted its report containing a six-point recommendation to the National Board of Revenue (NBR) recently.
The committee was formed to work out an exit-strategy from the PSI system and prepare a list of low-risk products.
The government has formed the committee for recommending possible steps for incorporation in the next budget for gradual phasing out of the PSI system from December 31 this year.
Officials said the board will sent the report to the Finance Minister AMA Muhith for his approval.
The revenue board will finalise the product-list for exemption from PSI system after getting finance minister's nod, they said.
The recommendation for withdrawal of PSI system in the case of major capital machinery and industrial raw materials now enjoying tax benefit has been made to facilitate industrial and economic growth.
The committee after scrutinising the requests received from different industries has recommended items, including oxygen, fly ash, stone and aluminum for PSI exemption.
Products enjoying duty-exemption through Statutory Regulatory Order (SRO) and imported under flat-rate duty can be allowed for import without PSI, the committee report said.
The committee has strongly opposed mandatory PSI system on import of sugar as it is being imported under flat-rate duty and there is no scope of revenue leakage through under-invoicing, a common practice.
It has listed nearly 700 industrial raw materials and capital machinery for inclusion in the PSI exemption list identifying availability of price information from the international market.
The committee has also recommended exemption of the products below US$ 1000 import value from the PSI system justifying that customs authority can conduct the valuation of those products.
"The government has to pay exorbitant service charge to the PSI companies for import of products, the value of which ranges between $100 and $1000. The government earns $100 to $1000 for PSI service charge of those products while it has to pay minimum $175 to those companies as per contract with them," the committee said.
The committee has listed a total of 1000 capital machinery and basic raw materials under 5.0 per cent import duty slab and recommended their exemption from mandatory PSI system.
"Importers have to pay additional 1.0 per cent service charge to the PSI companies in addition to 5.0 per cent duty. Import value of those products increases for this service charge," the committee report said.
The committee has also recommended withdrawal of PSI system from products imported under tariff value, pharmaceutical industries and raw materials, agricultural pesticide, newspaper and periodicals publications, leather and leather goods.