KARACHI: The Revenue Division of the Ministry of Finance has revised the customs duty (an average reduction of 50 percent) on import of goods into Pakistan from SAARC countries under South Asia Free Trade Area (SAFTA).
The Ministry issued SRO 1073(I)/2013 notifying revision of customs duty on 340 items importable from SAARC countries to a maximum of 5.0 percent with effect from January 01, 2014.
Duty on these 240 items ranged from zero to a maximum of 10 percent during the year ended December 1, 2013. And, customs duty on these goods ranged from zero to a maximum of 20 percent for the year ended December 31, 2012.
The South Asian Free Trade Area or SAFTA is an agreement reached on 6 January 2004 at the 12th SAARC summit in Islamabad, Pakistan. It created a free trade area of 1.9 billion people in Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri.
The seven foreign ministers of the region signed a framework agreement on SAFTA to reduce customs duties of all traded goods to zero by the year 2016.
The purpose of SAFTA is to encourage and elevate common contract among the countries such as medium and long term contracts. Contracts involving trade operated by states, supply and import assurance in respect of specific products etc. It involves agreement on tariff concession like national duties concession and non-tariff concession.
The objective of the agreement is to promote competition in the area and to provide equitable benefits to the countries involved. It aims to benefit the people of the country by bringing transparency and integrity among the nations. SAFTA was also formed in order to increase the level of trade and economic cooperation among the SAARC nations by reducing the tariff and barriers and also to provide special preference to the Least Developed Countries (LDCs) among the SAARC nations.