Industrial, scientific & technical: Pakistan, Belarus to ink agreement on cooperation next month

Pakistan and Belarus are to sign an agreement on industrial, scientific and technical cooperation next month, according to which GoP will exempt goods to be imported under grant in aid from value added tax, well informed sources told Business Recorder . A draft agreement proposed to be signed between Pakistan and the Government of the Republic of Belarus on industrial, scientific and technical cooperation was received from Belarus side through Ministry of Foreign Affairs.
Ministry of Industries and Production sent the draft agreement to various stakeholders ie Ministry of Commerce, Ministry of Science & Technology, Ministry of Foreign Affairs (MOFA), Finance Division, Economic Affairs Division and Federal Board of Revenue (FBR).
All stakeholders except FBR have endorsed the contents of the draft agreement. FBR objected to Article-5 of the proposed agreement and suggested that it should be aligned in accordance with the objections raised by them. The matter was taken up with the Belarus Embassy at Islamabad through MOFA, however, the Belarus side argued that if "non collection of the value-added tax" (Sales Tax) by Custom Authorities is not retained in Article-5 of the agreement, the fact of signing and implementation of the agreement would lose all its significance. The said agreement is proposed to be signed between Belarus and Pakistan during the Prime Minister of Pakistan's visit to Belarus from 1-3 August, 2017.
The sources said in order to resolve the issue, a meeting was held by the Secretary Ministry of Industries & Production on June 8, 2017, wherein among other representatives FBR and MOFA too participated and it was decided that the ECC is the appropriate forum to give such exemption as required under Article-5 of the agreement, which states that parties are obliged to not apply a value added tax by customs authorities when importing goods supplied under grant-in-aid on a cooperation base in accordance with Article 4 of the present agreement. Accordingly the case is placed before the ECC of the Cabinet to exempt value added tax under Sales Tax Act 1990 clause-13(2) (as amended up-to 31st August, 2016) as given in Article-5 of the proposed agreement, the sources added.