LAHORE: As the issue of double taxation among the federation and provinces gets worse, importers and exporters associated with Sialkot dry port and airport have approached Punjab Chief Minister Shahbaz Sharif to lodge a formal protest against the three taxes levied by the Punjab Revenue Authority (PRA).

The Sialkot Dry Port Trust (SDPT) wants the chief minister to intervene as it believes the taxes are unjustified and hamper the growth of zero-rated export sectors.

These taxes include the Punjab infrastructure development cess (PIDC), a levy of 16 per cent on intercity carriage of goods by rail or road and a 16pc sales tax provided by port operators (including airports and dry ports) and allied services.

Punjab`s Finance Minister Dr Ayesha Ghaus, who has received directive from the chief minister, presided over a meeting last Wednesday between both the sides to sort out the matter which has been lingering for the last six months and adversely affecting the business community.

She directed PRA Chairman Dr Raheal Siddiqui to hold another meeting with the SDPT to sort out the matter.The PRA defends the taxes on certain grounds. In a detailed note, the authority said: `PIDC was levied through an enactment of the Punjab Assembly, namely the PIDC Act 2015, which became chargeable with ef fect from July 1, 2015. The cess was supposed to be collected in the same manner and mode as customs duties.

However, its effective implementation began only with ef fect from May 25, 2016, when Pakistan Revenue Automation Ltd (PRAL) incorporated the collection of cess in the customs system, it said. Khyber Pakhtunkhwa also started collecting infrastructure development cess (IDC) on the same date.

As a result, PIDC is being charged at a rate of 0.9pc on the value of all imports cleared at dry ports and airports located within the territorial jurisdiction of Punjab, except for those exempted from the chargeability of cess.

Sindh has been charging a similar levy, i.e. Sindh infrastructure cess (SIC), since 1994 on all goods entering or exiting the territorial boundaries of the province, the PRA said.

The Sindh cess is being charged at various rates starting from 1.05pc of the customs-assessed value of the goods. `Unfortunately, even the goods which are essentially transhipments and are not customs-cleared in Sindh are also being subjected to SIC,` the PRA said.

`Consequently, goods which enter Sindh as bonded cargo and customscleared at the dry ports in Punjab or KP are being subjected to levy twice first in Sindh when leaving the seaports and then in Punjab or KP at the time of clearance of goods.

On the 16pc sales tax on intercity carriage of goods by rail or road, the PRA argued that the service was subject to value-added tax in most of the countries, including India. `The levy will help in documentation of economy and help the PRA achieve its annual target of Rs85 billion this fiscla year.The statement said the levy was held in abeyance only up to March 31, 2016 with respect to Truck Adda transporters. As the issue of discrimination between corporate and non-corporate sectors was before the PRA, the benefit of abeyance was never extended to any Truck Adda transporter and the submission of SDPT was misleading, the authority said.

ThePRAaddedthatthe16pctaxon services provided by port operators already existed in the form of federal excise duty on port services.

However, SDPT Chairman Khawar Anwer Khawaja insisted that the threes taxes on importers and exporters were unjustified as the government had imposed zero-rating for five major export sectors and would hurt the country`s exports additional.Talking to Dawn over the phone, he said that at least 15 exporters/importers from Sialkot were planning to move separate petitions in the Sindh High Court against 1.1pc SIC because of double-taxation, adding that 16pc PIDC was also unjustified.

Mr Khawaja said there was no justiñcation ofprovincialtaxation on clearanceandfreightof export-orientedraw material. He, however, agreed that exporters and importers should have no objection to giving IDC and other taxes on commercial imports.

He said double taxation involving IDC and 16pc intercity carriage and port operations in Punjab had already shifted 90pc business of exporters/ importers from provincial dry ports to the private transport, thus depriving Punjab of its due revenue chunk.