By Azhar Mahmood
KARACHI: The Central Board of Revenue (CBR) has allowed duty-free import of sub-components, components, sub-assemblies and assemblies for the local assembling of “CNG-vehicles” in the country.
The CBR, after the announcement of the Finance Bill, 2005-2006, keeping into the feedback of the stakeholders and their suggestions sent to it from various quarters, has entirely changed the duty structure for local assembling of vehicles and other agriculture vehicles.
During the course of discussion, the second amendment to the customs part of the finance bill was suggested by Omer Ayub Khan, thorough his letter addressed to secretary National Assembly, but later, this second amendment was again amended before the passing of the finance bill.
After the already passed finance bill, which has turned into Finance Act now, a new SRO-656-2006 has been issued by the CBR which has tried to rectify all past mistakes.
This SRO has imposed certain conditionalities on the local assembler to safeguard the revenues besides new customs duty structure has been imposed for the local assembling.
According to this SRO, the assemblers have to keep all record of imports for audit.
Import of only those spare parts or assemblies will be allowed at concessionary rates, which have been described in “Service Manual of the vehicles”.
All concessionary imports will be allowed on the basis of the list contained in the service manual of the vehicles.
Till the verification of the importable list of these items, the importers-cum-manufacturers will have to submit the corporate guarantees to Pakistan customs with regard of involved revenues.
Engineering Development Board (EDB) will be authrised to award “ruling” whether the imported items are in need of or not and importer will have the right to file appeal before the board.
All records of import will be submitted to EDB on annual basis.
EDB and Pakistan Customs both will have powers to conduct the audit of imported goods and if there will be any contravention then Pakistan Customs will be charging the duty and other taxes.
Under the SRO-656-2006, following is the new concessionary tariff for the import of the concessionary imports:
For the import of components for assembly or manufacture of agriculture tractors in any kit form, the rate will be zero.
Road tractors for semi-trailers and trailers, prime movers of 280 HP zero rate.
Other tractors falling under Pakistan Customs tariff heading 87.01, 10 per cent customs duty will be charged.
Vehicles Non-CNG, 5 per cent customs duty.
Motorcars and vehicles falling under heading 87.03, 35 per cent customs duty.
Vehicles not exceeding 5 tonnes falling under 20 per cent Pakistan Customs Tariff heading 87.04, 20 per cent customs duty.
Vehicles exceeding 5 tonnes falling under 10 per cent Pakistan Customs tariff heading 87.04, 10 per cent customs duty will be charged.
Vehicles of heading 87.11 Pakistan Customs tariff will be attracting 30 per cent duty.
Trailer of heading 87.16 the following component for local assembling will be allowed at 5 per cent concessionary rate:
Axle tube with brake without hub and drum.
Pneumatic suspension.
ABS system.
Kingpin and fifth wheel.
SRO now has prescribed a long list of mandatory availability of assembling facilities for availing concessionary imports.
The assemblers have to maintain the records of locally procured items as per the prescribed format giving almost the required details as per the sales tax laws of the country.