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December 04, 2008


Pakistan’s ship breakers hit by import of re rollable scrap

Pakistani media has reported ship breaking industry in Pakistan is on the verge of total collapse owing to large scale import of re rollable material under the garb of ferrous scrap which does not have duty and sales tax at import stage. Pakistan Ship Breakers’ Association has taken up the issue with the Mr Abdullah Yusuf chairman of Federal Board of Revenue.

The report cited Mr Azam Malik chairman of Pakistan Ship Breakers’ Association as saying that “Due to rampant import of re rollable scrap under the garb of re meltable material which does not have 15% sales tax at import stage, it has become impossible for the industry to import ships for scrapping which are presently being quoted at USD 490 to USD 520 per tonne in the world market.”

Pakistan Ship Breakers’ Association pointed out that it is not only causing huge revenue loss but also damaging the ship breaking industry. The ship breakers alleged that large scale import of re rollable material was being cleared by the Model Customs Collectorate under the customs administrative reforms, thereby causing severe damage to ship breaking industry which provides jobs to a large number of skilled and unskilled workers.

Pakistan government in the budget 2007-08 increased the assessable value for import of re rollable scrap from USD 290 per tonne to USD 400 per tonne, but the customs authorities did not feed these tariffs in their computer system which caused millions of rupees loss to the national exchequer. PSBA chief said under this automotive system of clearance a very large number of container loads of re rollable scrap are making its way into the domestic market.

Mr Malik said that a huge quantity of misdeclared scrap, such as used ship chain, shafting, pipes, moon shape pipes, channels etc, are available in the local market. Similarly, he said a large number of trucks loaded with moon shaped pipes are available in the market that are making their way from Taftan and Quetta through RCD highway after being cleared under the garb of re meltable scrap.