950805

Duty, ST waived on

power plants, imported

by some tex units

AFZAL AHMED

KARACHI: The government has decided to allow industrial units to import power generation plants without import duty and sales tax, where Bills of Entry have been filed by July 25.

In a letter to Collectors of Customs and Sales Tax, the Central Board of Revenue (CBR) has ordered release of the imported power generation plants against bank guarantees pending final decision in their cases. In all other cases pending final decision, the plants may be allowed inbonding facility, the CBR letter added.

The step has been taken on the demand by domestic textile mills in particular, which had imported power generation plants taking advantage of the government policy to allow duty free import to encourage private power generation. This facility was also provided in the Textile Relief Package announced in November last year.

According to textile industry sources, different textile mills had opened LCs for import of power generation units worth more than Rs 1000 million and some of the equipment imported had also been released without payment of these levies earlier.

However, the government imposed import duty of 10 percent since July 1 and sales tax at 15 percent since July 10, which would have meant additional expenditure of Rs 200 to 300 million for the importers. Many textile units were facing difficulties due to imposition of this import duty and sales tax on the equipment. They had requested the government through All Pakistan Textile Mills Association (APTMA) to exempt the power generation equipment for which LCs had been opened before July 1 this year because these mills had made their financial plans on the basis at the incentive provided by the government, and imposition of duties would have rendered the imports economically unviable.