Thursday, 5 February 2015

Collectors directed to allow export of 650,000 MT of sugar

The Federal Board of Revenue (FBR) has directed Collectors of Customs to allow sugar mills to export sugar to the extent of 650,000 metric ton (MT) in line with the latest decision of the Economic Co-ordination Committee (ECC) of the Cabinet. In this regard, the FBR has issued instructions to all Model Customs Collectorates on the export of sugar.

According to a FBR's instructions to the Collectors of Customs, Model Customs Collectorates should follow decision of the ECC on export of sugar. The FBR has circulated the decision of the ECC to the Collectors of Customs for compliance. As per ECC decision received at the FBR, the Economic Co-ordination Committee of the Cabinet considered the Summary dated December 23, 2014 submitted by the Ministry of Commerce on "Enabling Sugar Mills to Continue Sugarcane Procurement by improving Liquidity" and decided the following, in supersession of its earlier decision in Case No ECC-152/24/2014 dated 12th November, 2014.

Allowed Sugar Mills to export sugar to the extent of 650,000 MT. Quota would be allocated to Individual mills on first come first serve basis subject to the conditions that (i) Exports would be made against irrevocable letter of credit or a firm contract with 15% non-refundable advance payment (ii) Shipment would be made within 45 days of the registration of contract with the State Bank of Pakistan (SBP); non-refundable advance payment to be forfeited in favour of Government of Pakistan in case of non-performance; and (iii) Quota so allocated must be exported by 15th May, 2015.

Moreover, ECC approved imposition of Regulatory Duty @ 20% ad valorem on import of sugar, including Raw and Beet Sugar through an SRO. The ECC Allowed export of sugar to Afghanistan and Central Asian Republics by land route in dollar terms; Minimum price for export to Afghanistan shall be 450$ /MT. The ECC also approved Inland Freight Subsidy of Rs 2/kg and approved cash subsidy on sugar exports(r) Rs 8/Kg. The ECC also decided that the total cost of the subsidy amounting to Rs 6.5 billion would be borne by the Federal and the respective Provincial Governments as per sugar mills, location on 50:50 sharing basis.

The actions to implement the decision of ECC of the Cabinet may be initiated forthwith by the FBR under intimation to the Ministry of Commerce. Besides, State Bank of Pakistan may also arrange via its website full disclosure of the record of quota allocation and its actual exports, sources added.
Copyright Business Recorder, 2015

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