Govt losing revenue due to mis-declaration of prime steel as scrap

Large scale mis-declaration of prime steel as re-roll able scrap is resulting in a revenue loss of billions of rupees annually to the nation’s exchequer.

This has been disclosed by the secretary-general Pakistan Association of Large Steel Producers in a letter to the Special Secretary Ministry of Commerce.

It is mentioned in the letter that large-scale mis-declaration of prime steel/brand new steel as re-roll able scrap is resulting in a revenue loss of billions and billions of rupees annually to the nation’s exchequer.

Unfortunately, this activity Is happening for many years in an organized manner.

He claimed that this has been happening due to loopholes in the Import Policy Order. The menace could be addressed very easily by making corrections in the IPO.

The letter stated that during the last 8 years or so, evidence-based data from the exporting countries shows the export of brand new steel is to the tune of 500,000 to one million tons annually to Pakistan.

However, interestingly, the Pakistani authorities (Customs) allow the import of the same brand-new steel as re-roll able scrap and levy duties on re-roll able scrap.

Our Association has been pursuing this issue with MOC as well as FBR for a long and in the Budget FY 2021/22, the issue was partially resolved by FBR through an amendment a 27A of the customs Act,1969.

The practice of allowing mutilation of goods was disallowed after the filing of the GDs, after this amendment, roll able material that was previously mutilated at ports, now it is being brought after cutting off the prime steel in equal lengths of 2.5 meters in length.

The MOC can stop this practice and could save revenue for the Government to the tune of billions of rupees annually by making a small amendment to the relevant rule of the IPO.

The Scrap has a width not exceeding 1000 mm with a thickness of 6mm and above and a minimum length of 1 meter and not exceeding 1.5 meters.

Consisting of mill rejects and crop ends of ingots, billets, slabs, blooms and including cuttings of sheets and plates, pipes and bats whether in pieces or in rolled strips, cuttings of ship plates, used and pitted rails and girders, whereas in case of girders and pipes length shall be 1.5 meter, For this, we are submitting our past communications and a copy of the research report on the subject that explains how large scale mis-declaration of prime/brand new steel as scrap has been hitting the national exchequer destroying the documented steel manufacturers.

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