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GOVERNMENT
OF
MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS AND
REVENUE
(REVENUE
DIVISION)
***
(CUSTOMS)
S.R.O.450 (I)2004.-
In exercise of
the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and
in supersession of its Notification No. SRO 431 (I) /
97, dated the 13 th June 1997, the Federal Government
is pleased to exempt raw materials, sub-components, components,
sub-assemblies, assemblies and other items of machinery, as are not
manufactured locally, for the manufacture and supply of complete units or
plants for initial installation or for balancing, modernization, replacement
and expansion, from levy of the whole of customs-duties leviable
under the First Schedule to the Customs Act, 1969(IV of 1969) provided the
rates applicable to equipment and machinery when imported as part of a complete
industrial plant as listed in the Table below, is ten per cent or less even under any concessionary
notification. Where such duty is higher
than ten per cent then the exemption in customs duty shall be limited to a
maximum of ten per cent. The concession
in duty shall be subject to the following conditions, namely:-
(i)
the
manufacturer is recognized prime manufacturer-cum-supplier of such plants, and
has suitable in-house facilities for design, engineering and progressive
manufacture of such units or plants in respect of which he claims exemption
under this notification;
(ii)
the input-output ratios of items to be manufactured and total
requirement of raw materials, sub-components and components, sub-assemblies,
assemblies and other items of machinery is determined by Directorate of IOCO,
and a certificate of total requirement issued by such Directorate to the relevant Collector under
intimation to the CBR;
(iii)
the
manufacturer has suitable in-house facilities and registration with the Sales
Tax Department for manufacture of such goods or the importer-cum-manufacturer
is in possession of a firm contract for the manufacture of specified goods from
any other manufacturer registered with Sales Tax Department for the manufacture
of such goods;
(iv)
the manufacture shall, at the time of import of raw materials and
components make a written declaration on the bill of entry or customs declaration to the effect that the
inputs have been imported in accordance with his entitlement in terms of
condition (ii) above. The manufacturer
shall also declare that the imported raw materials and components, etc., shall
be consumed for the purpose of manufacture or assembly of the permissible
products within a period of eighteen months;
(v)
the manufacture shall communicate to the concerned Collector of Customs in
writing about the consumption of imported raw materials and components within
fifteen days of consumption of goods. In
case of non-consumption within eighteen months, the importer shall pay the duty
and taxes involved or shall give plausible reasons to the Collector of Customs
in an application to get extension for a reasonable period not exceeding six months;
(vi)
in case the manufacturer does not provide information regarding
consumption or otherwise of the imported raw materials within the prescribed
period of eighteen months, or if otherwise deemed necessary, the Duty
Suspension Audit Organization (DSAO) constituted by the Central Board of
Revenue shall carry out audit of the manufacturing unit. If the audit team is not satisfied regarding
the consumption of raw materials, they shall report their findings to the concerned
Collector of Customs who shall initiate proceedings for the recovery of leviable duty and other taxes and penal action under the
relevant provisions of the law;
(vii)
the
concession under this notification is available only to the ISO certified
manufacturers;
(viii)
the
manufacturer-cum-importer shall maintain record of the inputs and the goods
manufactured out of them in such form as may be prescribed by the Central Board
of Revenue or required under any other law enforced by the CBR; and
(ix)
the vendors, if directly linked with the prime manufacturer-cum-supplier,
shall also be entitled to avail exemption of customs duties under this
notification subject to fulfilling all the above requirements to the
satisfaction of Central Board of Revenue and Engineering Development Board.
Explanation.- For the purposes of this notification the expression “not manufactured
locally” shall mean the goods which are not included in the list of locally
manufactured goods, specified in the General Order and amendments made there
under, issued by the Central Board of Revenue or declared as such by EDB and
CBR.
TABLE
|
S. No. |
Description
of industrial plants or units
|
|
(1) |
(2) |
1.
Sugar mills up to 10,000 tcd
capacity per unit.
2.
Cement plants up to 4000 tpd
capacity per unit.
3.
Certain types of chemical plants for the production of
industrial chemicals.
4.
Thermal power plants up to 350 MW capacity
per unit.
5.
Hydel Power Plants up to
50 MW capacity per unit.
6.
Certain types of oil and gas development plants.
7. Textile
machinery.
8. Any
other project approved by the Economic Co-ordination Committee of the Cabinet.
(C.No. 1/6/Mach/ 2004-Pt.1)
(MUHAMMAD RAMZAN)
ADDITIONAL SECRETARY
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