FBR explains treatment of duty, taxes on goods imported under foreign trade agreements

KARACHI: Federal Board of Revenue (FBR) has explained treatment of duty and taxes on goods imported under trade agreements with foreign countries.

The FBR issued Customs Act, 1969 updated till June 30, 2019 incorporating amendments made through Finance Act, 2019.

The revenue body explained treatment duty and taxes on goods imported under Section 18C of Customs Act, 1969.

Section 18C: Rates of duty and taxes and determination of origin under trade agreements.

Sub-Section (1): Where under a trade agreement between the Government of Pakistan and the Government of a foreign country or territory, duty at a rate lower than that specified in the First Schedule is to be charged on articles which are the produce or manufacture of such foreign country or territory, the Federal Government may, by notification in the official Gazette, make rules for determining if any article is the produce or manufacture of such foreign country or territory and for requiring the owner to make a claim at the time of importation, supported by such evidence as may be prescribed in the said rules, for assessment at the appropriate lower rate under such agreement.

Sub-Section (2): Where in respect of any article, a preferential rate of duty is specified in the First Schedule, or is admissible by virtue of a notification under sub-section (1), the duty to be levied and collected shall be at the standard rate unless the owner of the article claims at the time of importation that it is chargeable with a preferential rate of duty, being the produce or manufacture of such preferential or free trade area, as is notified under sub-section (3) and the article is determined, in accordance with the rules made under sub-section (1) to be such produce or manufacture.

Sub-Section (3): For the purposes of this section and the First Schedule “preferential area or free trade area” means any country or territory which the Federal Government may, by notification in the official Gazette, declare to be such area.

Sub-Section (4): Notwithstanding anything contained in sub-sections (1) and (2), where the Federal Government is satisfied that, in the interests of trade including promotion of exports, it is necessary to take immediate action for discontinuing the preferential rate or increasing the preferential rate to a rate not exceeding the standard rate, or decreasing the preferential rate, in respect of an article specified in the First Schedule, the Federal Government may, by notification in the official Gazette, direct discontinuation of, or increase or decrease, as the case may be, the preferential rate.

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