FBCCI opposes cut in PSI products list

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) yesterday urged the government to withdraw the proposal for reducing the Pre-Shipment Inspection (PSI) product list in the 2010-11 national budget.
Finance Minister AMA Muhith in his budget speech proposed the reduction of PSI item list to enhance the capacity of Customs Department of the National Board of Revenue (NBR) towards scrapping the PSI system in future.
In a letter to the Prime Minister, the outgoing Vice-President of FBCCI Abul Kashem requested the government to withdraw the proposal to protect the local industry and increase revenue earnings.
The apex trade body also sent a copy of the letter to the finance minister.
Talking to the news agency, Kashem said he forwarded the request to the highest authority of the government.
“All the businessmen, except some dishonest ones, want continuation of the PSI system. Some C&F agents in Chittagong are against the system so that they can continue tax evasion. Some dishonest customs officials also support their demand,” he said.
The letter, sent on June 17, said the local industry would be hit hard if any abrupt reduction of about 2,500 products from the mandatory PSI products list takes place as proposed by the finance minister.
“The revenue earnings of the government will also be affected as the proposed reduction measure will pave the way for massive under-valuation,” according to the news agency quoting the letter.
Presently, compulsory PSI is applicable to 4,285 items.
Major items such as industrial raw materials, milk foods, refrigerators, telecommunication equipment and electrical items fall under the 2,500 items proposed to be withdrawn from the compulsory PSI list.
“Customs Department is yet to build up their capacity and attain the required efficiency to handle the load of valuation and inspection of imported goods under a PSI-free regime,” said the letter.
Quoting a recent report of an NBR task force on PSI, the letter said the report categorically mentioned to continue the PSI scheme until the Customs Department raises its capacity at satisfactory level.
FBCCI, at the consultative committee meeting ahead of the National budget for fiscal 2010-2011, had also demanded continuation of PSI to uphold the interest of the business community, it added.
Muhith, in his budget speech, proposed the withdrawal of about 2,500 items in the PSI list, and also mentioned to extend the system till December 2010.
Muhith said that one of the principal objectives behind the introduction of the PSI system was to strengthen the capacity of the workforce in the customs department through training from PSI agencies, and that the government would ultimately replace them by taking up the responsibility of conducting such activities.