Islamabad: Pakistan Association of Large Steel Producers has expressed satisfaction and has appreciated the decision of Customs authorities on the valuation ruling issued by the Directorate General of Customs Valuation, Karachi, of linking the value of steel scrap with London Metal Bulletin.
PALSP that represents the large steel producers expressed optimism and expressed hope of more such initiatives from the Customs side of Federal Board of Revenue under the current member Customs Mr. Tariq Huda Shah as well Chief Exports & Valuation Dr. Faisal Bukhariare taking positive steps, and this will helpin improving the working of the Customs which is an important department of FBR. This decision has set a good example.
There are two systems of making valuation of imported goods under section 25 of Custom Act;One is ITP (Import Trade Price) in which a minimum price is fixed and goods are assessed on the basis of ITP or Declared Price in Invoice/ LC (letter of credit) whichever is higher; and Second is LMB which means value of items as per the London Metal Bulletin at the date of LC opening or value declared in LC whichever is higher. This change shall make the valuation system market based and transparentwhich will be good for both industry as well as the Federal Board of Revenue.
In this regard, a number of representations were received wherein, it was contended that the values fixed in valuation ruling was causing problems for industry at the clearance stage because the international market varies with demand and supply factor. Moreover, it was also informed that prices of scrap are also published in London Metal Bulletin (LMB) for Pakistan imports and thus, to ensure transparency, fairness as well as uniformity in assessment, the value should be linked with LMB prices and freight factor be added thereon, when published prices given as FOB.
The Association has made a recommendation to the DG Valuation for making one correction in the decision/ ruling as previously the price difference between Re-rollable and re-meltable scrap was of USD 100 PMT but in the current ruling the difference has been reduced to only USD 65 which is not justifiable to our industry. The industry requests to maintain of difference to the tune of USD 150 between the Re-rollable and re-meltable scrap.