Be cautious about giving Safta duty benefits
The customs authorities will not grant duty benefits under the South Asia Free Trade Area (Safta) if importers submit import related documents issued by non-member states of the South Asian Association of Regional Cooperation (Saarc), said a circular from the National Board of Revenue (NBR).
The NBR followed a commerce ministry decision that firms which submit import documents issued by a third country in support of products imported from Saarc states will not be eligible to get the reduced duty benefit applicable under Safta.
In its letter issued to field offices of customs, the NBR said even though products are exported from Saarc states with certificates of origin, reduced tariff benefits cannot be given if import documents such as invoices and packing lists are issued by third countries. The revenue authority asked the field offices to be cautious in granting duty benefits under the trade deal.
At present, importers get the scope to bring goods under the South Asian trade pact by paying up to 5 per cent customs tariff. In case of import of goods other than Saarc nations, they have to count normal customs duty, said an official of the NBR seeking to remain unnamed.
The Safta was signed in 2004 but came into force on January 1, 2006, and yet, intra-regional trade accounts for barely 5 per cent of South Asia's total trade, according to the World Bank.
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