Don’t scare the investor away, please—I

In compliance with the conditions agreed with the IMF (International Monetary Fund), the government intends to impose 17 percent GST across the board, inclusive of the ones that so far stand exempted from GST. Export Processing Zones Authority (EPZA) at Karachi is one such entity which is exempted from GST. It enjoys exemption both at import of raw material stage and export of finished goods stage.

The government in its proposed supplementary finance bill intends to undo it and impose 17 percent GST at import stage with an understanding that it will be adjusted at export stage or refunded, whereas a notification of the Ministry of Finance and Coordination, dated 23 August 1980 vide S.R.O 88(1) states: “The investors in the zone are exempted from the whole of customs duties and sales tax levies on all the goods imported and exported from the Export Processing Zones established under the Export Processing Zones Authority ordinance 1980 (IV of 1980)”. It is a widely known fact that duty exemption is the only attraction for a prospective investor to invest in a particular economic/business zone.

(To be continued tomorrow)

Farhat Ali (Karachi)

Copyright Business Recorder, 2022