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Source: Dawn
KARACHI: Port and shipping experts said that 16 per cent Federal Excise Duty (FED) levied in the new budget on services provided by ports and terminal operators would harm the sector.
The country’s ports are already expensive than the regional ports, including Dubai, Colombo and Singapore, and with the imposition of FED the situation will worsen, they added.
Shipping circles informed that as a result of higher rates of container handling at the country’s ports many shipping companies had stopped calling at the Karachi Port and Qasim Port.
Some officials at the ministry of finance and Federal Bureau of Revenue (FBR) were so ignorant of the fact that no budget proposals could be notified or imposed till such time they are approved by the National Assembly.
Consequently, the ministry notified on June 13 the imposition of 16 per cent FED on all services rendered by ports and terminal operators.
Similarly, the FBR on the day, when the federal budget was presented before the National Assembly, issued a notification for the imposition of FED on port services.
The FED has been proposed on services provided by port and terminal operators in relation to imports, piloting and mooring, deliveries and storage in port area, including demurrage and wharfage.
According to notification terminal operators include Karachi International Container Terminal (KICT), Pakistan International Container Terminal (PICT) and Qasim International Container Terminal (QICT).
However, port and shipping experts disputed the new levy on the grounds that globally shipping lines were suffering losses due to low freight rates and recession and were out to cut their operational expenses.
Unfortunately, Pakistan’s containerised and bulk cargo import is 100 per cent handled by foreign shipping lines as the state-owned PNSC only has 11 ships.
Capt Anwar Shah, former director general of ports and shipping and governor World Maritime University, Malmao, Sweden, told Dawn that the Port of Singapore twice reduced its charges bringing a total impact of 35 per cent.
He said the global recession had hit shipping industry badly and many big shipping companies had gone bankrupt.
The country’s ports are already expensive than the regional ports, including Dubai, Colombo and Singapore, and with the imposition of FED the situation will worsen, they added.
Shipping circles informed that as a result of higher rates of container handling at the country’s ports many shipping companies had stopped calling at the Karachi Port and Qasim Port.
Some officials at the ministry of finance and Federal Bureau of Revenue (FBR) were so ignorant of the fact that no budget proposals could be notified or imposed till such time they are approved by the National Assembly.
Consequently, the ministry notified on June 13 the imposition of 16 per cent FED on all services rendered by ports and terminal operators.
Similarly, the FBR on the day, when the federal budget was presented before the National Assembly, issued a notification for the imposition of FED on port services.
The FED has been proposed on services provided by port and terminal operators in relation to imports, piloting and mooring, deliveries and storage in port area, including demurrage and wharfage.
According to notification terminal operators include Karachi International Container Terminal (KICT), Pakistan International Container Terminal (PICT) and Qasim International Container Terminal (QICT).
However, port and shipping experts disputed the new levy on the grounds that globally shipping lines were suffering losses due to low freight rates and recession and were out to cut their operational expenses.
Unfortunately, Pakistan’s containerised and bulk cargo import is 100 per cent handled by foreign shipping lines as the state-owned PNSC only has 11 ships.
Capt Anwar Shah, former director general of ports and shipping and governor World Maritime University, Malmao, Sweden, told Dawn that the Port of Singapore twice reduced its charges bringing a total impact of 35 per cent.
He said the global recession had hit shipping industry badly and many big shipping companies had gone bankrupt.
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