Wednesday, July 31, 2013

Pakistan Bans Import of Duty Free Gold

From nation.com.pk

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ISLAMABAD - The Economic Coordination Committee on Tuesday decided to impose a temporary ban of 30 days on duty-free import of gold.

According to SRO 266(I)/2001, dated May 7, 2001, the government has taken initiatives to diversify exports to promote the export of value-added gold jewelry. For this purpose, currently there are special schemes in operation to facilitate jewelry exporters whereby they are able to import gold without payment any duty on the condition that this gold is re-exported after converting it into value-added jewelry.

Recently however, there have been serious apprehensions that these schemes for duty-free import of gold are being abused by some unscrupulous elements and the national interest is being damaged. That is to say that instead of the duty-free gold being used for the purpose it was intended, it is being smuggled to India.

In this respect, it is noteworthy that in recent months the import of gold into Pakistan, under these schemes has seen an enormous surge which is highly abnormal.

During the period of January to June, 2013, gold worth Rs92.97billion was imported compared to Rs19.132 billion for the same period in 2012. This trend has become even more alarming since in the first 26 days of July, the import of gold under these schemes was to the tune of Rs52.549 billion.

In view of these developments, the government has taken cognizance of the apparent abuse of these schemes and decided to take some immediate steps to prevent further damage to the national economy.

The ECC decided to impose a short-term ban of 30 days on the duty-free import of gold, but this ban is purely temporary and is intended to allow the government sufficient time to re-examine the operation of these schemes with a view to speedily removing any loopholes and deficiencies. The objective of the government is to quickly restore these scheme in an improved form, so that genuine exporters of gold jewelry are facilitated in the best possible way to contribute to the national objective of increasing exports.

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