The secretary of Excise and Taxation, Manzoor Memon told The News that those goods which had been exempt over the last 10 years would now be taxed under a new Pak-Afghan transit trade agreement.
Memon estimated that the government of Sindh could earn up Rs4 billion through the newly levied cess, but added that the exact figure would become clear within a month. He also clarified that this infrastructure-cess would not be imposed on Nato oil tankers as they were still exempt.
Meanwhile, in a statement, the Sindh Minister for Excise and Taxation, Mukesh Kumar Chawla said that infrastructure-cess would be levied and collected under section-9 of the Sindh Finance Act, 1994, with immediate effect. It would be imposed on goods from abroad coming into the province of Sindh and then being transported to Afghanistan.
Chawla said that in the past, Afghan transit goods were exempt from tax under the Afghan Trade Agreement. However, he pointed out that according to Article 32 of the new Afghanistan-Pakistan Transit Trade Agreement of 2010, infrastructure-cess would now be imposed on the goods. He added that this would result in a substantial amount of income for the provincial exchequer.
It may be mentioned here that the province of Sindh had suffered badly due to the destruction of its roads by heavy vehicles that were transporting the transit goods from Karachi to Afghanistan. Those allegedly also led to the increase of goods being smuggled into Afghanistan.
According to an official familiar with the new transit trade agreement, the Sindh Government was allowed to impose the Infrastructure-Cess once it was approved by the Federal government.
According to the rules laid down by the Sindh government, the Infrastructure-Cess would be collected at the rate of 0.8 percent of the value of a consignment of goods entering the province from outside the country.
Under the Pak-Afghan Transit Trade agreement, customs authorities would examine the containers carrying transit goods for Afghanistan at the ports. The examination would be carried out in the presence of the concerned Assistant/Deputy Collector of the Excise Department.