All Pakistan Cement Manufacturers Association (APCMA) Chairman Aizaz Mansoor Sheikh has called on the Federal Minister for Finance Dr Abdul Hafeez Sheikh to release Rs 270 million against inland freight subsidy claims, promised by the government to cement exporting mills. In a letter written to the government, APCMA chairman requested resolution of the matter and the provision of relief to the ailing industry, which has been incurring severe losses due to high cost of production, declining exports and slacking local demand of the commodity.
He reminded the finance minister that the Economic Coordination Committee (ECC) and Trade Development Authority of Pakistan (TDAP) approved inland freight subsidy on cement to be destined for export at the ports. Accordingly, the government issued a public notice on March 26, 2010 allowing inland freight subsidy at the rate of 35 percent on cement exports till June 30, 2010. Based on this decision, the cement producers have exported a huge quantity of commodity but unfortunately not a single claim was entertained even after the passage of eight months, he pointed out.
It was also noted that during the eight months, overall exports to different countries stood at 6.72 million tonnes in which exports through sea routes predominated, he added.
APCMA chairman also requested the finance minister to resolve the issue on the Afghan border the earliest in order to boost cement exports and allowing exports to continue to grow to their full potential. The duty draw back on cement exports to Afghanistan is based on an Afghan Custom document dubbed ‘Gumrak’. Earlier, Custom authorities were allowing the duty draw back based on a photocopy of Gumrak but more recently they have started to call for the original Gumrak.
He termed the Custom authorities’ demands for original Gumrak against duty draw back illogical because it is unavailable to exporters themselves and retained by authorities in Afghanistan. “The issue should be resolved once and for all and duty draw back should be allowed on photocopy of Gumrak and the pending cases should be cleared accordingly”, he said. He also requested FBR to reinstate the Supervised Clearance System (SCS) at the Chaman-Afghan border for keeping records of exports and called for the system to be applied on internal sales of cement as well to make the tax collection process transparent.
APCMA chairman also called for the phasing out of tax burden on the industry including Federal Excise Duty at Rs 700 per tonne, Special Excise Duty at 2.5 percent, General Sales Tax of 17 percent and five percent Withholding Tax on utilities in order to stave off complete bankruptcy. As the cement industry consumes heavy amounts of electricity, WAPDA and KESC should not charge five percent withholding and 15 percent tax surcharge to the cement makers as it is deepening the concerns of the industry that is already struggling for its survival, the chairman opined.
