Hurdles gone: Dewan Group, FC resolve row over vehicles delivery
Govt steps in to settle dispute over payment of additional costs.
An understanding was reached between the two sides in the presence of Finance Minister Ishaq Dar on Wednesday. PHOTO: PID
ISLAMABAD:
The government has brokered a deal between the Dewan Group of Industries and the Frontier Constabulary, which will resolve a six-year-old dispute that had hampered delivery of about 10 dozen special purpose vehicles to the law enforcement agency.
An understanding was reached between the two sides in the presence of Finance Minister Ishaq Dar on Wednesday, according to a handout issued by the finance ministry. They agreed to resolve the issue within three days.
The Dewan Group of Industries had struck a deal with the FC Khyber-Pakhtunkhwa to deliver 113 special purpose vehicles. However, the group could not meet the commitment after the then government created hurdles, said people close to the group. The imported vehicles have remained parked at a warehouse in Karachi, which will be cleared only after payment of all outstanding duties and taxes.
Officials said the dispute arose because of depreciation of the rupee against the US dollar that substantially increased tax liabilities of the Dewan Group. The FC refused to bear the additional cost due to the impact of exchange rate.
The duties and taxes on imported vehicles are calculated on the basis of previous day’s exchange rate. Now, the additional cost will be borne by the federal government.
The issue had dragged on since 2008, leading to the swelling of exchange rate, customs duties, sales tax as well as penal surcharge, said the finance ministry. The two sides also engaged in litigation, which made the matter more complicated.
The Ministry of Interior requested the finance minister to try and settle the dispute.
Now, the finance minister has directed the Dewan Group to clear outstanding payments regarding re-valuation on account of appreciation in the exchange rate.
He also said in case of a fund shortfall faced by the FC while clearing enhanced sales tax and customs duties, necessary finances would be provided to the FC by the federal government to meet the shortfall. The government also decided to remit penal surcharges.
Dar also pressed both the parties to withdraw legal cases against each other.
The minister directed the Dewan Group and FC K-P as well as Federal Board of Revenue (FBR) officials present on the occasion to sign an agreement to pave the way for implementation of the decisions.
Dar said the government wanted to strengthen the FC to enable it to tackle militancy along with other security agencies and the provision of vehicles was a step in that direction.
Meeting with Saudi envoy
Finance Minister Ishaq Dar also met Jassim M Al-Khaldi, charge d’affaires, Embassy of Saudi Arabia. Jassim Al-Khaldi handed over a letter from the Saudi finance minister to Dar, informing him about a Saudi loan of 206 million riyals for the Chehlla Bandi road project near Muzaffarabad.
The loan will be repayable in 20 years at 2% interest rate with a five-year grace period.
Dar said Pakistan wanted to hold another donor conference to arrange funds for rehabilitation of the internally displaced persons affected by Operation Zarb-e-Azb.
The government had organised a donor conference in November, but the donors did not commit additional funds at that time.
The minister briefed the Saudi envoy about the ongoing Operation Zarb-e-Azb and said the war on terrorism had taken a heavy toll on Pakistan’s economy and the overall losses had already crossed $100 billion.
A large number of people were displaced due to the operation and hefty resources were needed for their rehabilitation, he said.
Published in The Express Tribune, January 8th, 2015.
The government has brokered a deal between the Dewan Group of Industries and the Frontier Constabulary, which will resolve a six-year-old dispute that had hampered delivery of about 10 dozen special purpose vehicles to the law enforcement agency.
An understanding was reached between the two sides in the presence of Finance Minister Ishaq Dar on Wednesday, according to a handout issued by the finance ministry. They agreed to resolve the issue within three days.
The Dewan Group of Industries had struck a deal with the FC Khyber-Pakhtunkhwa to deliver 113 special purpose vehicles. However, the group could not meet the commitment after the then government created hurdles, said people close to the group. The imported vehicles have remained parked at a warehouse in Karachi, which will be cleared only after payment of all outstanding duties and taxes.
Officials said the dispute arose because of depreciation of the rupee against the US dollar that substantially increased tax liabilities of the Dewan Group. The FC refused to bear the additional cost due to the impact of exchange rate.
The duties and taxes on imported vehicles are calculated on the basis of previous day’s exchange rate. Now, the additional cost will be borne by the federal government.
The issue had dragged on since 2008, leading to the swelling of exchange rate, customs duties, sales tax as well as penal surcharge, said the finance ministry. The two sides also engaged in litigation, which made the matter more complicated.
The Ministry of Interior requested the finance minister to try and settle the dispute.
Now, the finance minister has directed the Dewan Group to clear outstanding payments regarding re-valuation on account of appreciation in the exchange rate.
He also said in case of a fund shortfall faced by the FC while clearing enhanced sales tax and customs duties, necessary finances would be provided to the FC by the federal government to meet the shortfall. The government also decided to remit penal surcharges.
Dar also pressed both the parties to withdraw legal cases against each other.
The minister directed the Dewan Group and FC K-P as well as Federal Board of Revenue (FBR) officials present on the occasion to sign an agreement to pave the way for implementation of the decisions.
Dar said the government wanted to strengthen the FC to enable it to tackle militancy along with other security agencies and the provision of vehicles was a step in that direction.
Meeting with Saudi envoy
Finance Minister Ishaq Dar also met Jassim M Al-Khaldi, charge d’affaires, Embassy of Saudi Arabia. Jassim Al-Khaldi handed over a letter from the Saudi finance minister to Dar, informing him about a Saudi loan of 206 million riyals for the Chehlla Bandi road project near Muzaffarabad.
The loan will be repayable in 20 years at 2% interest rate with a five-year grace period.
Dar said Pakistan wanted to hold another donor conference to arrange funds for rehabilitation of the internally displaced persons affected by Operation Zarb-e-Azb.
The government had organised a donor conference in November, but the donors did not commit additional funds at that time.
The minister briefed the Saudi envoy about the ongoing Operation Zarb-e-Azb and said the war on terrorism had taken a heavy toll on Pakistan’s economy and the overall losses had already crossed $100 billion.
A large number of people were displaced due to the operation and hefty resources were needed for their rehabilitation, he said.
Published in The Express Tribune, January 8th, 2015.