Tag: customs duty

FBR implements duty exemption/concession under 2nd Phase Pak-China FTA

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued concessionary rates for 6,786 tariff lines for goods imported under Second Phase of Free Trade Agreement (FTA) between Pakistan and China.

The notified rates will be effective from January 01, 2020 for next 15 years i.e. December 31, 2034.

The FBR issued SRO 1640(I)/2019 to implement the revised customs duties for goods imported from China.

The SRO said:

“S.R.O.1640(I)/2019.- In exercise of the powers conferred by section 19 of the Customs Act,1969 (IV of 1969), and in supersession of Notification No. S.R.O. 659(I)/2007,dated the 30th, June, 2007, the Federal Government is pleased to exempt, with effect from the first day of January, 2020, unless specified otherwise, the import into Pakistan from Peoples Republic of China of the goods specified in column (3) of the Table below, falling under the Heading and sub-Heading numbers of the First Schedule to the said Act as specified in column (2) of the said Table, from so much of the customs duty specified in the First Schedule as on the 1st January , 2020 to the said Act as in excess of the rates specified in columns (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17) or (18) of the Table with effect from the corresponding date:

“Provided that the goods are manufactured or produced and imported in conformity with the Rules of Determination of Origin of Goods and the operational certification procedures for the Rules of Origin notified by the Ministry of Commerce vide No. S.R.O. 1286(I)/ 2005, dated the 24th December, 2005 read with the Import Policy Order, 2016:-

The second phase of China-Pakistan FTA came into effect earlier this month, allowing Pakistani manufacturers and traders to export more than 300 new products to the Chinese market for zero duty charges.

The two neighboring countries have already completed all legal procedures and formalities to start implementation of the agreement.

Pakistan and China signed a protocol for implementation of the agreement during the last visit of Prime Minister Imran Khan to China.

Pakistan is already enjoying zero duty on export of 724 products to China under the first FTA signed between the two countries in 2006.

The major products on which tariff has been eliminated are textiles, garments, seafood, meat, other animal products, prepared food, leather, chemicals, plastics, oilseeds, footwear as well as engineering goods including tractors, auto parts, and home appliance machinery.

January 1, 2020
Locally manufactured two-, three electric wheelers proposed 1pc sales tax for seven years

ISLAMABAD: All two and three wheelers manufactured under Electric Vehicle Policy will sold at less than one percent sales tax for next seven years to bring the purchase price of EVs down, according to the policy.

However, all two and three-wheeler EV’s imported shall be sold at one percent sales tax for the next five years.

EVs will be exempted from registration fees and annual token tax to encourage prospective buyers and the FBR shall evolve a policy to evolve tax incentives for prospective buyers of the two-wheeler and three wheelers.

All existing incentives of the Auto Development Policy 2016-2021 will remain intact, according to EV Policy 2019.

The policy said that Pakistan had a large market of two and three wheelers. More than twenty million such vehicles are already on roads in Pakistan.

Their local production has reached indigenization of more than 90 percent. Therefore, the need is to incentivize the already available manufacturing expertise for converting to e-bikes and e-rickshaws.

Moreover, a new category of low speed electric vehicles have emerged that is added into this category.

The policy said that EV specific parts and components, not being manufactured locally compliant to UNECE 1958 Agreement ‘WP.29’ standards as well as equivalent international standard applied by the United States, European Union and other major EV manufacturers, will be allowed import at one percent customs duty and one percent sales tax for the next two years.

Registration number plates of EVs will have a distinct color/design to create EV specific zones in high density areas. The registration number plates will be different from other typical vehicles to distinguish between two, three and low speed four wheel electric vehicles and other vehicles segments.

A special provision for import of swappable battery-based three wheelers is being introduced to help both introduction of such vehicles and charging infrastructure.

Those manufacturers or consortia who demonstrate setup of manufacturing of these units and battery swapping infrastructure of running of these vehicles will be allowed to import a cumulative number of 20,000 completely built units (CBU) along with the charging infrastructure at one percent customs duty and can sell these units at one percent sales tax.

December 1, 2019
FBR imposes up to 7 percent additional customs duty

ISLAMABAD: Federal Board of Revenue (FBR) has imposed up to seven percent additional customs duty on items falling under tariff slab of 20 percent and higher slabs.

The FBR issued SRO 670(1)/2019 on Saturday stated that in supersession of its Notification No. SRO 630(1)/2018, dated the May 24, 2018, the federal government approved to levy additional customs duty on import of goods specified in the First Schedule to the said Act, at the rate of-

(i) two per cent on goods falling under tariff slabs of 0 percent, 3 percent and 11 percent;

(ii) four per cent on goods falling under tariff slab of 16 percent; and

(iii) Seven per cent on goods falling under tariff slab of 20 percent and higher slabs including slabs of specific rates.

The FBR said that the value of goods for purpose of this levy shall be the value as determined under section 25 or section 25A of the said Act.

The additional customs duty shall not be levied on the following, namely: –

(i) import of seeds and spores for sowing (PCT 0904.2120, 1006.1010,
1209.0000);

(ii) import under Chapter 31 of First Schedule of the Customs Act,1969
(IV of 1969);

(iii) import of goods classifiable under PCT codes, 52.01, 52.03, 9501.3000, 5503.1100, 5503.1900, 5503.3000, 5503.4000, 5503.9000, 5504.1000, 5504.9000, 5506.1000, 5506.3000, 5506.4000, 5506.9000 and 5507.0000;

(iv) import of goods classifiable under PCT codes 2902.3000, 2914.1200, 2915.1290, 2933.9990, 3202.1000, 3202.9010, 3202.9090, 3204.1100, 3204.1300, 3207.1090, 3208.1090, 3208.9090, 3403.9910, 3506.9110, 3506.9190, 3812.3900, 3906.9020, 4005.1090, 4005.9900, 8453.2000, 9606.2920 and 9606.2990;

(v) plant and machinery used in manufacturing or production of goods as is classifiable under Chapter 84 and 85 of the First Schedule to the Customs Act, 1969 (IV of 1969);

(vi) import under PCTs 8517.1211 and 8517.1219

(vii) import under Chapter 99 of First Schedule of the Customs Act, 1969

(IV of 1969);

(viii) import under Fifth Schedule to the Customs Act, 1969 (IV of 1969)
excluding;

(a) serial numbers 30, 32, 33 and 35 of table of Part-l,

(b) serial numbers 20 to 28, 30, 60, 96, 102, 108 to 118 of Table of Part Ill; and

(c) Serial numbers 29 to 51, 66 to 85, 109 to 115, 117 to 126, 128 to 155 and 157 to 169 of Table-A, Sr. No. 4 to 9, 11 to 14, 19 to 21 of Table-B and Sr. No.1 to 47 of Table-C of Part VII

(ix) import under the Baggage Rules, 2006;

(x) import under sub-chapters 3 and 7 of chapter XII and chapter XV of Customs Rules, 2001;

(xi) import under Notification No.SRO.577(I)/2005 dated 6th June, 2005;

(xii) import under Notification No.SRO.565(1)/2006 dated 5th June, 2006;

(xiii) import under Notification No.SRO.693(I)/2006 dated 1st July, 2006;

(xiv) import under Small and Medium Enterprises and Export Oriented Units Rules, 2008;

(xv) import under temporary importation scheme vide S.R.O. 492(1)/2009, dated the 13th June, 2009; and

(xvi) imports under condition (vii) of SRO 678(1)/2004, dated the 7th August, 2004, by the Exploration and Production Companies, their contractors and service companies for offshore projects only.

The FBR said that this notification shall take effect from July 1, 2019.

June 29, 2019

Customs duty concessions allowed on 1650 raw materials

KARACHI: The government has allowed customs duty concessions on import of 1650 raw materials through Finance Bill 2019.

According to Deloitte Yousuf Adil, Chartered Accountants, the Finance Bill proposed to introduce concession of Customs Duty on import of 1650 raw materials/industrial inputs.

Major items are listed as follows:

PCT code	Description	Rate
2710.1911	Kerosene	0
2710.1913	J.P.4	0
2710.1998	Spin finish oil	0
2711.1200	Propane	0
2711.1300	Butanes	0
2711.1400	Ethylene, propylene, butylene and butadiene	0
2711.1910	L.P.G.	0
2711.1990	Other	0
2711.2100	Natural gas	0
2711.2900	Other	0
2805.1200	Calcium	0
2805.1900	Other	0
2805.4000	Mercury	0
2808.0010	Nitric acid	0
2808.0090	Sulphonitric acids	0
2809.1000	Diphosphorus pentaoxide	0
2809.2010	Phosphoric acid	0
2814.1000	Anhydrous ammonia	0
2814.2000	Ammonia in auqeous solution	0
2817.0000	Zinc oxide; zinc peroxide.	0
2818.3000	Aluminium hydroxide	0
2819.1000	Chromium trioxide	0
2819.9010	Chromium oxide	0
2819.9020	Chromium hydroxide	0
2936.2100	Vitamins A and their derivatives	0
2936.2200	Vitamin B1 and its derivatives	0
2936.2300	Vitamin B2 and its derivatives	0
2936.2400	D- or DL-Pantothenic acid (Vitamin B3 or Vitamin B5) and its derivatives	0
2936.2500	Vitamin B6 and its derivatives	0
2936.2600	Vitamin B12 and its derivatives	0
2936.2700	Vitamin C and its derivatives	0
PCT code	Description	Rate
2936.2800	Vitamin E and its derivatives	0
2937.1200	Insulin and its salts	0
3002.9010	Human blood	0
3002.9020	Animal blood	0
3105.2000	Mineral or chemical fertilisers containing the three fertilising elements nitrogen, phosphorus and potassium	0
8427.1000	Self- propelled trucks powered by an electric motor	0
8433.6000	Machines for cleaning, sorting or grading eggs, fruit or other agricultural produce	0
8436.8000	Other machinery	0
8444.0000	Machines for extruding, drawing, texturing or cutting man- made textile materials.	0
8530.1000	Equipment for railways or tramways	0

June 20, 2019

Finance Bill 2019: reduced duty rates proposed for various imported goods

KARACHI: The government has announced reduction in customs duty on import of various goods.

The reduction in duty has been proposed through Finance Bill 2019.

According to A F Ferguson & Co. Chartered Accountants Firm, by virtue of amendment in First Schedule and Fifth Schedule, reduction in customs duty has been proposed for the following items:

Acetic acids from 16 percent to 11 percent

Oxalic acid from 11 percent to 3 percent

Sheets of veneering from 11 percent to 3 percent

Fibreboard of wood of certain specifications from 16 percent to 11 percent

Fabric (non-woven) from 16 percent to 11 percent

Aluminium cans from 20 percent to 11 percent

Chemicals used in leather or like industries from 20 percent /16 percent to 16 percent /11 percent

Insulation tape double sided from 11 percent to zero percent

Shoe lasts from 20 percent to 16 percent

Other articles of Vulcanised rubber 20 percent to 5 percent

Graphite or other carbon or mixture of these products 11 percent to 3 percent

Other refractory ceramic goods from 11 percent to 3 percent

Other Electric motors and generators from 20 percent to 16 percent

Other automatic regulating and controlling instruments from 20 percent to 16 percent

Multi-ply (clay coated paper and paper board) and aluminium foil from 18 percent to 15 percent

Coils of aluminium alloys from 8 percent to 5 percent

Pre-fabricated room/structures for setting up new hotels/motels in Hill Stations, Gilgit-Baltistan, AJK, and Coastal Areas of Baluchistan from 11 percent to 8 percent

(ii) Following new concessions have been proposed under the Fifth Schedule:

– Laser transmitter, laser receiver, control box, rigid mast pack, with or without scraper at concessional rate of 2 percent

– Plant and Machinery by developers, contractors and service companies involved in infrastructure development of Large Diameter Gas Pipelines(i.e. 24” and above) projects at concessional rate of 10 percent to 0 percent subject to certain conditions

– Aluminium sheets and coils and aluminium foil, AKD wax and dispersing agents at concessional rate of 5 percent

– Imports by manufacturer of infant formula milk registered under Sales Tax Act, 1990 at concessional rate of 5 percent

– Import of Exposide resin, if imported by manufacturer of powder coatings registered under Sales Tax Act, 1990 and subject to annual quota by IOCO at concessional rate of 10 percent

– Polymers of ethylene and other plastic raw materials on import by manufacturers of diapers and sanitary napkins registered under Sales Tax Act, 1990 at concessional rates of 16 percent to 5 percent

– Import of carbon steel strip imported by manufacturer of shaving bladed/razors registered under Sales Tax Act, 1990 at concessional rate of 5 percent

– Import of CNG vehicle conversion kits approved by OGRA imported by authorized dealers at concessional rate of 5 percent

(iii) Following amendments for availing concessions earlier granted have been proposed for the following sectors:

Sector Particulars

Agriculture Sector

Certain conditions for availing the concession on import of agricultural machinery have now proposed to be waived off

Power transmission and grid stations

An additional condition has been proposed for availing concessional duty on import of machinery and equipment meant for power transmission and grid stations. The goods shall not be sold without prior approval of the FBR.

Marble, granite and gem stone extraction and processing industries

Additional condition for the concessional rate on machinery and equipment is proposed to be added with respect to disposal of the imported machinery.

June 17, 2019
Finance Bill 2019: duty exemptions on various imported goods proposed

KARACHI: The government has proposed exemptions from customs duty on import of various goods through Finance Bill 2019.

According to A. F. Ferguson & Co. Chartered Accountants Firm the Finance Bill 2019 has proposed exemption from customs duty is proposed on following items:

– Various industrial inputs / raw materials

– Pharmaceutical products

– Plastic film medical grade

– Fertilizers

– Plant and machinery for setting up Hydrocracker plants for oil refining

– Raw skins and hides

– Machinery parts and items relating to textile industry

– Solar air water generator

– Raw material for paper industry

– Wood

– Certain raw materials used in manufacture of home appliances subject to certain conditions

– Raw material and components for local manufacture of Hemodialyzer, used in hydrolysis equipment by kidney failure patients

June 17, 2019
Budget 2019/2020: Salient features of customs duty

ISLAMABAD: The government has announced changes in customs duty regime which included relief and revenue measures.

RELIEF MEASURES

1. To standardize printing and preservation of Holy Quran, import of good quality duty free Art paper is being allowed.

2. Exemption of CD on 18 medicinal inputs/items

3. Exemption of CD on Modular/ Particle Free Operation Theatre

4. Exemption of CD on Medicines for certain rare diseases

5. Incentive to promote tourism by reducing duty on pre-fabricated structures for hotels

INCENTIVIZING LOCAL INDUSTRY:

1. Exemption of CD on more than 1650 raw materials/industrial inputs

2. Reduction of CD on Writing & Printing Papers

3. Exemption of CD on Raw- materials of Paper Industry

4. Exemption of CD on import of Wood

5. Reduction of CD on Glass Board for LED Panel manufacturing

6. Reduction of CD on input goods for paper based Liquid Food Packaging Industry

7. Reduction of CD on Acetic Acid

8. Reduction of CD on Nonwoven fabrics

9. Exemption of CD on Machinery Parts / Accessories for Textile Sector

10. Exemption of CD on Elastomeric Yarn

11. Rationalization of CD on Aluminium Beverage Cans & Inputs thereof

12. Exemption of CD on raw material for hemodialyzers used by kidney patients

13. Tariff rationalization on Home Appliance Sector

14. Reduction of CD on Base Oil as input for Coning Oil, White Oil and other Textile Oils

15. Reduction of CD on Raw Material for Manufacturing of Pre-Sensitized Printing Plates

16. Exemption of CD on Preparations for Metal Surfaces as input for Solar Panels

17. Exemption of CD on Foundation Cloth

18. Reduction of Duty on Wooden Sheets for Veneering

19. Reduction of CD on Oxalic Acid

20. Reduction of CD on Raw Material of Powder Coating Industry

21. Reduction of CD on Raw Material for Paper Sizing Agents

22. Reduction of CD on Bobbins & Spools of Paperboard

23. Exemption of CD for Hydrocracker Industry for oil refining

24. Rationalization of tariff structure for SIM card manufacturing industry

REGULATORY DUTY:

1. Reduction of RD on Mobile Phones

2. Reduction of RD on smuggling prone items and other industrial inputs

3. Reduction of RD on Tyres

REVENUE MEASURES:

1. Increase in rate of Additional Customs Duty for non-essential items

2. Withdrawal of exemption on import of LNG

June 12, 2019
FBR issues SROs to withdraw additional, customs duty on import of cotton

ISLAMABAD: Federal Board of Revenue (FBR) has exempted customs duty and additional customs duty on import of cotton for the period of February 01 to June 30, 2019.
(more…)

February 4, 2019
Customs, regulatory duties on 135 tariff lines to be reduced / eliminated for raw materials

In a major move aimed at boosting both the export sector and domestic industrial production, the Pakistani government has unveiled plans to eliminate or reduce customs duty, additional customs duty, and regulatory duty on 135 tariff lines associated with crucial raw materials.
(more…)

January 26, 2019
Finance Supplementary Bill: FBR issues salient features of customs duty regime

The FBR released crucial details on Thursday regarding the transformative changes brought to the Customs duty regime through the Finance Supplementary (Second Amendment) Bill, 2019, which was presented on January 23, 2019. These modifications are poised to impact various sectors and streamline the country’s trade policies.
(more…)

January 24, 2019