Subsidy on sugar export: TDAP begins receiving claims from exporters

With the issuance of notification regarding compensating inland freight cost to sugar exporters, Trade Development Authority of Pakistan (TDAP) has started receiving claims from exporters. According to sources, the authority has recently issued notification, stating that in order to provide relief to the sugar industry, the government has decided to compensate inland freight cost to exporters of 0.895 million tons of sugar at the rate of Rs 1.75 per kilogram. 

Though various exporters have submitted claims during the past few days, however, the exporters based in Khyber Pakhtunkhwa, Punjab and Balochistan, who exports the commodity to Afghanistan and Central Asian states, have reservations over the criteria/conditions for applying for the facility. There is confusion in the notification that whether the exporters exporting goods via land routes are eligible or not for the facility. In this regard, some exporters have also approached TDAP. 

However, sources in TDAP claimed that all legal exporters of sugar were being treated equally. The reservations of exporters regarding the facility have been removed, they further said. The subsidy facility has been introduced mainly to support the exporters, who are unable to export the commodity in the stiff competition abroad. 

The government had allowed the facility keeping in view the large production surpluses, high input costs, sustained low domestic demand and low international prices as well as volatility in inland freight costs riding on high domestic fuel prices. Pakistan Sugar Mills Association (PSMA) had proposed more export of sugar beside subsidies to help the exporters in the present crisis. It is also claimed by PSMA that current stocks of sugar in the country is at least 1.5 MMT, whereas, a total quantity of 4.7 MMT will be produced in sugar season 2012-13. Besides, a total quantity of 5.9 MMT of sugar is expected to be available for the year 2012-13 against the annual domestic consumption of 4.2-4.3 MMT resulting in 1.7-1.9 MMT surplus sugar in the country. 

According to terms and conditions set by TDAP to apply for the subsidy only shipment for a total export of 0.895 million metric tones of sugar will be eligible for subsidy. Exporters will submit the duly attested documents to PSMA, which after verifying the documents, would forward it to TDAP for further processing. Exporters will file their applications on the prescribed forms, with their Commercial Bank which will process their respective E-forms for shipments. The exporters are required to attach the following documents with their applications: 1. Summary of claim 2. Duplicate/Triplicate copy of E form. 3 A copy of commercial invoice. 

Besides, copy of shipping bill/GD in original along with one photo copy set which will be retained by the bank and original returned to the exporter after verification by the manager of the bank. A copy of B/L certified by shipping line/shipping agent which handled the shipment, will be required. 

A copy of B/L certified by the Shipping line/Shipping agent, which handled the shipment beside a copy of Bank credit Advice wherever available at the time of filing of claim. However, exporters can file their claims without BCA, but payment in such cases will be authorised after receipt and filing of copy of BCA. Check list of required documents should be signed and stamped by the Manager of the Processing Bank. It will be the responsibility of the Exporter’s Bank to ensure that all required documents are correct and attached. 

Copyright Business Recorder, 2013

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