Bank guarantee on plastic raw material import to check market distortion
FE Report | Monday, 23 June 2008
The National Board of Revenue (NBR) Sunday said it has imposed the condition of providing 100 per cent bank guarantee on import of plastic raw materials under the bond facility to thwart market distortion and revenue leakage.
It has blamed a section of importers of plastic raw materials for abuse of the bond facility. They do it by selling the imported goods in the local market.
Such a practice of the importers is leading to an uneven competition among the commercial and bond-licensed importers, it added.
The NBR has found some evidences of abusing the bond facility.
In a clarification on the plastic raw material importers' demand of bank guarantee withdrawal, the revenue board said: 'The concerned importers under the bonded warehouse facility are demanding only withdrawal of 100 per cent bank guarantee, which could create misconception.'
The government has ordered it only for those, who will not be able to import plastic raw materials with inscription of the statement 'Imported under bond, not for sale' in indelible ink.
In the proposed budget for the upcoming fiscal, the government has made it mandatory to inscribe the statement on packets of plastic raw materials imported under the bond facility. It has waived the earlier rule of using the punching method.
If any importer fails to import with inscription of the statement on plastic bags, they have to give 100 per cent bank guarantee to release those products under the bond facility, the budget proposal said.
'The NBR has imposed the rule to prevent sale of imported products under the bond facility and also to create a level-playing field between importers enjoying duty-free facility under bond and commercial importers who have been paying taxes on import of products.'
Earlier in the budget for fiscal 2007-08, the government made it mandatory to mark the bags containing plastic raw materials as 'Imported under bond, not for sale' in red, using the punching method.
Later, the board relaxed the rule suspending its order for the period of July 1 to October 31 as import of plastic raw materials came to a halt following the decision.
The importers had been facing a problem in import as marking the bags with seals containing the statement by using the punching method is not possible in case of petrochemical products.
It has blamed a section of importers of plastic raw materials for abuse of the bond facility. They do it by selling the imported goods in the local market.
Such a practice of the importers is leading to an uneven competition among the commercial and bond-licensed importers, it added.
The NBR has found some evidences of abusing the bond facility.
In a clarification on the plastic raw material importers' demand of bank guarantee withdrawal, the revenue board said: 'The concerned importers under the bonded warehouse facility are demanding only withdrawal of 100 per cent bank guarantee, which could create misconception.'
The government has ordered it only for those, who will not be able to import plastic raw materials with inscription of the statement 'Imported under bond, not for sale' in indelible ink.
In the proposed budget for the upcoming fiscal, the government has made it mandatory to inscribe the statement on packets of plastic raw materials imported under the bond facility. It has waived the earlier rule of using the punching method.
If any importer fails to import with inscription of the statement on plastic bags, they have to give 100 per cent bank guarantee to release those products under the bond facility, the budget proposal said.
'The NBR has imposed the rule to prevent sale of imported products under the bond facility and also to create a level-playing field between importers enjoying duty-free facility under bond and commercial importers who have been paying taxes on import of products.'
Earlier in the budget for fiscal 2007-08, the government made it mandatory to mark the bags containing plastic raw materials as 'Imported under bond, not for sale' in red, using the punching method.
Later, the board relaxed the rule suspending its order for the period of July 1 to October 31 as import of plastic raw materials came to a halt following the decision.
The importers had been facing a problem in import as marking the bags with seals containing the statement by using the punching method is not possible in case of petrochemical products.