Text of (CUSOTMS) SRO 460(I)/2004.
MINISTRY OF FINANCE, ECONOMIC AFFAIRS,
STATISTICS AND REVENUE
(REVENUE DIVISION)
Islamabad, the 12th June, 2004
NOTIFICATION
(CUSTOMS)
SRO 460(I)/2004.-In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and clause (a) of sub-section (2) of section 13 of the Sales Tax Act, 1990, the Federal Government is pleased to exempt machinery, equipment, materials, specialized vehicles (4x4 non luxury), accessories, spares, chemicals and consumables, not manufactured locally, imported by the mineral exploration and extraction companies from so much of the customs-duty and sales tax as mentioned below, -
(a) the whole of customs-duty leviable under the First Schedule to the Customs Act, 1969 (IV of 1969), and the whole of sales tax leviable thereon during the exploration phase;
(b) the customs-duty in excess of five per cent ad valorem leviable under the First Schedule to the Customs Act, 1969 (IV of 1969), and the whole of sales tax leviable thereon during mine construction phase. The five per cent customs-duty payable during mine construction phase may be deferred for a period of three years and shall be paid by the importer forthwith on completion of three years from the date of import along with surcharge at the rate of six per cent per annum; and
(c) the customs-duty in excess of five per cent ad valorem leviable under the First Schedule to the Customs Act, 1969 (IV of 1969), and the whole of sales tax leviable thereon during extraction phase, subject to the following conditions, namely:-
(i) the importer shall, at the time of importation, make a written declaration on the bill of entry or goods declaration that the goods have been imported for use in a government approved mining project;
(ii) the aspect of different phases ie whether exploration or mine construction or extraction shall be certified by the relevant Regulatory Authority ie Mineral Wing of the Ministry of Petroleum and Natural Resources, Government of Pakistan;
(iii) the goods shall not be sold or otherwise disposed of without prior approval of the Central Board of Revenue and payment of customs-duties and taxes leviable at the time of import;
(iv) if the goods are removed to an area other than that for which these have been imported before completion of project, the amount of customs-duties and sales tax exempted under this notification and any penalties that may be imposed in this behalf shall be recovered under the relevant provisions of Customs Act, 1969 (IV of 1969), and the Sales Tax Act, 1990;
(v) the exemption available to mineral exploration and extraction companies shall be admissible only to such companies who hold permits, licences, leases and who enter into agreements with Government of Pakistan;
(vi) the importers shall maintain an account of all imports along with the relevant records as prescribed by the Customs Rules, 2001, and the Sales Tax Act, 1990;
(vii) items imported under this notification which become surplus, scrap, junk, obsolete or otherwise shall be disposed of in the following manner, namely:-
(a) in the event an item other than vehicles, is sold to another mining company entitled for concession under this notification no import duties shall be levied or charged. Otherwise, it shall be sold through a public tender and duties shall be recovered at the rate of ten per cent ad valorem of the sale proceeds;
(b) for vehicles there would be a minimum retention period of five years after which the vehicles may be disposed of in the manner provided in (a) above except that the full rate of import duties and sales tax, net of any import duties already paid, shall be charged subject to an adjustment of depreciation at the rate of two per cent per month up to a maximum of twenty-four months;
(c) vehicles can be surrendered at any time to the Government of Pakistan without payment of any import duties or sales tax under intimation to the Central Board of Revenue; and
(d) items imported by the mining companies which have been rendered scrap, with change in their physical status, composition or condition and PCT classification, will be dealt with as scrap and shall be chargeable to customs-duties and sales tax accordingly, at standard rates.
(viii) mineral exploration and extraction companies for the above phases may import equipment, specialized vehicles (4x4 non luxury) on an import-cum-export basis against a corporate guarantee equal to the value of import duties and sales tax that would have otherwise been payable on import as per project phase. Should the goods not be exported on the conclusion of the project or transferred with the approval of the relevant Regulatory Authority to another duty free mining company then the company shall be liable to pay customs-duty and sales tax chargeable at the time of importation; and
(ix) the expression "not manufactured locally" shall mean the goods which are not included in the list of locally manufactured goods, specified in the General Order, issued by the Central Board of Revenue or certified as such by the Engineering Development Board or Central Board of Revenue.
[C.No.1/6/Mach./2004]
(Muhammad Ramzan)
Additional Secretary
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