KARACHI: The State Bank of Pakistan (SBP) on Tuesday directed the authorised dealers to entertain exportersí freight subsidy claims, approved by the Trade Development Authority of Pakistan (TDAP), according to a circular issued by the central bank here on Tuesday.

The central bank advised the authorized dealers that they should receive the freight subsidy claims from exporters for onward submission to the trade authority. “After scrutiny and approval, the trade authority, will forward the claims eligible for payments to the SBP-BSC (Bank) Head Office, Karachi against the Ministry of Financeís proper allocation,î the circular said.

Upon receipt, the SBP-BSC (Bank) would credit the authorised dealersí accounts for onward credit of the same to the exportersí account, it said.

Recently, the trade authority has compensated exporters against the additional cost on inland transportation for certain sectors, including cement, light engineering, leather garments, furniture, soda ash, hydrogen peroxide, caustic soda and sanitary wares.

The cement sector is availing 35 per cent of inland cost as subsidy, whereas all other sectors were provided 50 per cent subsidy.

Lodging a protest against, what they termed disparity in the subsidy rates, two cement exporters filed a plea against the government’s decision in the Sindh High Court, demanding provision of subsidy on higher rates, as their units are 100 kilometres away from the port.

On April 9, the high court suspended the government’s decision and issued a stay order on the inland export subsidy.

Muhammad Akmal Bhatti, Additional Director, State Bank, said that it is clearly mentioned in the circular that only those claims will be entertained, which were approved by the Trade Development Authority of Pakistan.

“We have simplified the procedure of claiming the facility,” he said.

On March 26, the trade authority had issued procedure to claim subsidy against the additional cost on inland transportation, which was announced through the Trade Policy 2009/10.

Under the terms and conditions, the trade authority said that exports routed through sea would be eligible for the facility.

The facility is available during the period March 26 to June 30 and for the products originating 100 kilometres away from the port.