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Country heading towards economic stability: Dar

18 April, 2014

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ISLAMABAD: Federal Minister for Finance Senator Ishaq Dar said on Thursday that the country had come out of the economic crisis and was heading towards financial stability.

He expressed these views while chairing the Economic Coordination Committee (ECC) meeting here on Thursday. The committee meeting approved Rs2 billion relief package for Ramazan and conditionally lifted the ban on the import of gold. The Utility Stores Corporation (USC), which used the subsidy of Rs1.65 billion in the last year's relief package, has this time asked for a Rs1.624 billion subsidy for the relief package for the month of Ramazan. However, the meeting that started at 5.30pm and continued till 9pm approved Rs2 billion for the relief package and details of the relief on essential commodities will be submitted by the USC in the next ECC meeting for consideration.

In the meeting, the top management of the USC has been asked to increase the availability of pulses and flour, the official who attended the meeting told our sources. The ECC decided to lift the ban on the import of gold and gold jewellery subject to some conditions that include:

a) imports under savings in any one-month period are restricted to a maximum of 10kg per exporter; b) the penalty of default in export commitment is 5pc of leviable duty under SRO 266, which is practically "Nil", as customs duty and sales tax on import of gold is 0%. Therefore, import authorisation under the aforementioned savings clause is cancelled if the exporter fails to honour the export commitment, within the stipulated timeframe; c) all import authorisations issued previously under SRO 266 are cancelled for those exporters, who do not opt for fresh registration or fail to apply for new jewellery passbook with effect from May 15, 2014; d) the maximum amount of gold imported under any single transaction should not exceed 10 kg; e) the ban imposed under SRO 760 on the import of gold, vide SRO 53(I)/2014 is lifted, f) the ban on commercial import of gold imposed vide SRO 52(I)/2014, dated 24.1.2014 is lifted.

The ECC decided to re-impose five percent customs duty by withdrawing the SRO 15(I)/2010 that exempted cotton yarn import from customs duty of 5% in order to check the import of cotton yarn. The country was importing cotton yarn without any duty since 2001 and before that there was 5% duty on the import of yarn cotton. The official said that in 2011, there was a shortage of local cotton yarn owing to which 5 percent duty on its import was withdrawn. Now the local cotton yarn industry is suffering from the cotton being imported on zero duty. "Since the country is now rich in local cotton yarn, so on the demand of the local industry, the government has imposed 5 percent customs duty on the import of cotton yarn".

The ECC also decided to withdraw its earlier decision of providing the mechanism of joint expert mediation between the SNGPL, power purchasers and IPPs namely Saif, Sapphire and Orient. It may be mentioned that the three IPPs claimed Force Majeure Event (FME) under the respective Gas Supply Agreements (GSAs) from the SNGPL, owing to its inability to supply gas to the projects due to rupture of one of its gas pipelines by terrorist activity during the year 2011. It was decided that since the IPPs are not willing to accept the out of scope collective mediation which is binding in nature, the dispute resolution mechanism of the respective project agreements may be followed.


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