Text of (CUSOTMS) SRO 453(I)/2004.
MINISTRY OF FINANCE, ECONOMIC AFFAIRS,
STATISTICS AND REVENUE
(REVENUE DIVISION)
Islamabad, the 12th June, 2004
NOTIFICATION
(CUSTOMS)
SRO 453(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 436 (I)/ 2001 date the 18th June, 2001, the Federal Government is pleased to exempt raw materials, sub-components, sub-assemblies, components and assemblies as are not manufactured locally, imported for the progressive manufacture of vehicles, equipment and machinery as specified in Table-I and sub- components, sub-assemblies, components, and assemblies as specified in Table-II below from so much of customs-duties leviable under the First Schedule to the said Act as are in excess of the rates specified in Table-I and Schedule to the Table- II thereto, subject to the following conditions, namely: -
(i) the importer-cum-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 with any other manufacturer having suitable in-house facilities and registered with Sales Tax Department for the manufacture of such goods;
(ii) the manufacturer-cum-importer shall submit a complete list of items he intends to import each year in the prescribed format for the manufacture of goods mentioned in Table -I and Table -II as per indigenisation programme for the approval of the same by Indigenisation Committee of EDB;
(iii) the manufacturer-cum-importer, at the time of import of approved items, shall make a written declaration on the bill of entry or customs declaration to the effect that the items have been imported in accordance with his entitlement and in the form or knock down condition as approved by EDB or its relevant Committee for the manufacture or assembly of specified items. The manufacturer shall also declare that the imported items shall be consumed for the purpose of manufacture or assembly of the permissible products within a period of one hundred and eighty days;
(iv) the input output ratios of items to be manufactured and total annual requirement of raw materials, sub-components, sub-assemblies and components shall be defined and determined by EDB or by any other organisation authorised by EDB and CBR;
(v) the clearance of inputs is allowed through only one port or dry port, nearest to the manufacturing unit;
(vi) the manufacturer-cum-importer shall maintain records of the inputs and the goods manufactured from imported items in such form as may be prescribed by the Central Board of Revenue or required under any other law enforced by the CBR;
(vii) the manufacturer cum importer shall communicate to the concerned Collector of Customs in writing about the consumption of imported items within sixty days of consumption of goods. In case of non-consumption within one hundred and eighty days from the date of import, the importer shall pay the customs-duty and other taxes involved or obtain extension from the Collector of Customs giving plausible reasons for a reasonable period;
(viii) in case the manufacturer-cum-importer does not provide information regarding consumption or otherwise of the imported goods within a period of one hundred and eighty days of import or such extended period as allowed by the Collector or if otherwise deemed necessary, the records of importer-cum-manufacturer shall be audited by the Duty Suspension Audit Organisation (DSAO) or by any other person duly appointed by the Collector. If upon the audit, consumption of goods is not found satisfactory, the Collector of Customs shall initiate proceedings for the recovery of leviable customs-duty and other taxes besides penal action under the relevant provisions of the laws in force;
(ix) The manufacturer-cum-assembler of automotive vehicles enumerated at Serial No. 3 to 6 of Table -I shall sell the said vehicles to an NTN holder only and the record of the same shall be furnished to CBR or to any other designated person on monthly basis;
(x) the imported CKD kits of importer-cum-manufacturers and vendors must strictly comply with the list approved by Indigenisation Committee. Any extra items imported in the CKD kit shall attract CBU rates of duty applicable to relevant vehicles;
(xi) in case of any default in achieving the indigenisation targets for any year the items imported in violation of the indigenisation program in that year shall attract statutory duty and taxes chargeable on the relevant CBU vehicles. The amount payable on account of default shall be determined for each year on the basis of the shortfall in the indigenisation targets as determined by the Technical Audit Team of EDB or any other organisation authorised by EDB and CBR and confirmed by the Indigenisation Committee; and
(xii) the continued availability of the exemption under this notification shall be contingent upon, the achievement of progressive annual indigenisation targets and payment of customs duty and other taxes, ascertained by the Central Board of Revenue;
Exclusions.-Mild steel bars, mild steel rods and mild steel wire rods shall not be entitled for exemption under this notification.
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 items in the indigenisation program approved by the Indigenisation Committee comprising members from the Central Board of Revenue and the Ministry of Industries.
TABLE-I
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S No Description of vehicles Rate of duty
(1) (2) (3)
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1 Agricultural tractors falling under PCT heading 87.01. 0 %
2 Other tractors falling under PCT heading 87.01. 10 %
3 Vehicles falling under PCT heading 87.02 (Non-CNG) 20 %
4 Fully CNG dedicated vehicles falling under PCT heading 87.02 5 %
5 Vehicles falling under PCT heading 8703. 35 %
6 Vehicles falling under PCT heading 87.04 20 %
7 Motorcycles falling under PCT heading 87.11 30 %
8 Bicycles falling under PCT heading 8712. 20 %
9 Bulldozers falling under PCT heading 84.29 0 %
10 Combined Harvesters falling under PCT heading 8433.5100. 0 %
11 Assembly kits of all the above, categories corresponding
to the number of their exported 0 %
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units subject to the following conditions, namely:-
(i) no duty drawback was claimed at the time of export;
(ii) the imported kits relate to the vehicle of same engine capacity as was
exported; and
(iii) the importer makes a declaration in the bill of entry or customs declaration at
the time of import that he intends to avail this facility and produces the
evidence of export, namely:-
(a) copy of the bill of export or customs declaration bearing examination
report of customs;
(b) bill of lading; and
(c) foreign exchange repatriation certificate.
TABLE II
Description of goods
Sub-components, sub-assemblies, components and assemblies of automotive vehicles, automotive climate control equipment, automotive batteries and bicycles meant for in-house use, or supply to OEMs and assemblers, or sale, excluding items at S.No 5 and 6, to sales tax registered person or to an NTN holder.
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SCHEDULE
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S.No Category Rate of duty on Rate of duty on Rate of duty on Rate of duty on
raw materials sub-components sub-components components/assemblies
approved under DP
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(1) (2) (3) (4) (5) (6)
1 For tractors 0 % 0% 0% CKD rates of Table-1
2 For vehicle of PCT 87.03 5% 10% 20% -do-
3 For Motor cycles 5% 10% 20% -do-
4 For bicycles 5% 10% 15% -do-
5 For vehicles falling under 5% 10% 15% -do-
PCT heading 87.02 & 87.04
(Non-CNG)
6 For fully CNG-dedicated 0% 0% 0% -do-
vehicles of PCT heading
87.02
7 Other vehicles 0% 0% 10% 15%
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[C.No1/6 Mach/ 2004-Pt.II]
(MUHAMMAD RAMZAN)
Additional Secretary
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