To encourage investors for setting up new industrial plants in the country, the Central Board of Revenue (CBR) has announced that machinery, equipment and apparatus liable to 5 percent customs duty (exempted from sales tax and withholding tax) would be assessed for levying duty as per value declared by the importer. The decision has been communicated to all collectors of customs for immediate compliance.
Official sources told Business Recorder here on Sunday that the customs duty would be assessed on machinery and equipment on the basis of declared value to avoid valuation disputes which result in delay in the clearance of plant and machinery.
They said it was a major demand of trade associations, which has been accepted to encourage industrialisation in the country, adding it would also play a key role in boosting import of plant and machinery.
According to the CBR instructions, they said: "It has been decided that the machinery and other goods which are liable to only customs duty at the rate of 5 percent (exempt from sales tax and withholding tax) shall be assessed for calculating duty as per the declared value."
Interpreting these instructions, officials said the Customs collectorates have to accept the declared value of machinery and equipment in cases where the equipment is exempted from sales tax and withholding tax and liable to minimum slab of 5 percent customs duty.
When asked whether the customs would accept whatever the importer has declared, they said the CBR has the option to go to valuation committees in case of any dispute.
Officials were confident that the decision would attract maximum investment to the country while considerably reducing the number of disputes between the department and the importers. It is important to mention here that the CBR has already directed Customs authorities in Karachi to facilitate provisional release of these goods using powers under section 81 of the Customs Act, 1969.
The CBR has also set up committees comprising customs officials and importers for resolving disputes regarding imported machinery/ equipment. In this regard, these standing committees comprising customs officials and businessmen has been set up for each group/item to take up the requests of importers/exporters.
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