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CBR investigating under-invoicing and dumping of blades

ISLAMABAD (October 20 2003): To check dumping and under-invoicing pertaining to import of Indian blades by Pakistani traders, the Central Board of Revenue (CBR) has started countrywide investigation to curb illicit import which is damaging the local industry.

Sources told Business Recorder here on Sunday that the tax authorities were mum on the issue till a leading manufacturer of shaving razor blades pointed out huge dumping of Indian blades in the local market through smuggling and under-invoicing.

The CBR has issued a directive to all collectors of customs to ascertain whether over 200 million Indian blades were annually smuggled into Pakistan and consignments coming into Pakistan are being under-invoiced causing serious damage to the domestic manufacturers.

The tax authorities would devise a new strategy to deal with the issue after getting the viewpoint of collectorates.

A survey conducted by the local manufacturers of blades revealed that 76 per cent of the barbershops use Indian brands like Vidyut, Vijay, Centwin, Super max, Master and Laser.

Local manufacturers have informed the CBR that the dumping of Indian double-edge blades in Pakistan is not a healthy sign as WTO/GATT is nearing. Over 76 per cent of the local shops carry Indian double-edge blades.

A comparison of Pakistani and Indian blades showed that the retail price of a local carbon steel blade is Rs 1.50, but Indian stainless steel blades are being dumped at an average of Rs 150 per 200 blades.

They contested that the Indian low quality blades are offered to the traders at a very high profit margin.

Over 80 per cent of the double edge blades are consumed by local barbers. They buy these Indian blades of inferior quality at a cheaper rate.

Interestingly, the barbers use the blade only once. That is why they do not care about the quality. Most of these barbers are illiterate and have no idea about the effects of Indian smuggled blades on the economy.

Indian blades are of inferior quality because they use Indian steel. More than 200 million Indian blades are either smuggled or imported (under-invoiced) per year.

If drastic measures are not taken to control this situation, the industry would be closed in near future, they maintained.

The local industry has proposed that the cost of imported blades be fixed at the export price of stainless steel blades ie US$ 20.75 per thousand blades for determining the import duties and other levies.

Moreover, import duty on shaving blades should be ensured on the exact value and not the invoiced value to prevent under-invoicing.

Heavy surcharges should be imposed on the trade if they are found selling Indian smuggled blades.

Heavy penalties will discourage the traders from buying these Indian blades thus automatically cutting off their supply, they added.

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