Exports from the Export Processing Zones (EPZs) to tariff area has been restricted to 20 percent under the new SRO 461 (1) 2004 and the manufacturing units in Karachi Export Processing Zone (KEPZ) would have to export their products up to 80 percent to the overseas.
The new SRO, covering exports from the EPZs, has brought a revolutionary change in manufacturing business in the Zone, which had earlier no restrictions on export to the tariff area on payment of duty and taxes.
The SRO, issued in the new Finance Bill, provides that the units established in the EPZs could export only up to 20 percent of their total production to the tariff area in Pakistan, while 80 percent of their production would be exported to other countries.
Another major change has been made in acquisition of duty-free vehicles by the units working in the KEPZ through SRO 461 of the new Finance Bill, which has now been linked with the amount of investment and the number of employees.
The units were earlier allowed to import without duty three vehicles, including a 1600 cc car for executive use, a coaster for the employees and a bus for labourers.
Under the new law, units with investment of one million dollars will be allowed duty-free import of 1000 cc car, while the units with five million-dollar investment and, 10 million-dollar investment, can import 1300 cc and 1600 cc cars respectively.
The SRO further provides that the units, employing 25 workers, will be eligible to import duty-free or purchase one coaster whereas those employing more than 25 workers will be allowed duty-free import or purchase of a bus up to 50 seats.
The SRO provides that the units with a turnover of five million dollars per annum will be allowed duty-free import or purchase of one cargo vehicle or truck.
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