The Central Board of Revenue (CBR) is likely to announce a package of tax incentives for the Export Processing Zone declared for the Tuwairqi Steel Mills Limited (TSML). Sources said the TSML has submitted the amended version of schedule 2 of the agreement (facilities/incentives) in the zone to the CBR for further action.
The notification for the declaration of area leased out by the Pakistan Steel Mills to Tuwairqi Steel Mills as the Export Processing Zone was issued on October 15, 2005. Presently, CBR wings, including customs, sales tax and income tax are examining the schedule submitted by the TSML.
Under the agreement, no sales tax would be collected on input goods, including electricity and gas bills utilised in the zone. No excise duty, no customs duty and other taxes on material used in the construction/erection of the project would be collected. The zone would be allowed duty-free import of vehicles under certain conditions.
The responsibility for all services and matters in the zone solely rests with the Export Processing Zone Authority (EPZA), including collection of presumptive tax as final tax from units at the time of export of goods from the zone and regulation of production-oriented labour laws. The labour laws would not be applicable, while the relief from double taxation will be subject to the bilateral agreement inked with different countries.
As per condition, there is no minimum or maximum limit for investment in the zone and 100 percent equity rights are available to investors with full repatriation of capital and profits.
The import of machinery, equipment and material either from tariff area or abroad for exclusive use within the limits of the EPZ or for making exports from there and goods imported for warehousing purposes to be duty- and sales tax-free.
The zone would be bonded area under the management of EPZA outside the limits of tariff area of Pakistan. Imports into the zone from the tariff area would be deemed to be exports from Pakistan and imports into the tariff area from the zone deemed to be imports from abroad. EPZ units will be allowed to supply goods to ''''customs manufacturing bonds'''' and inter-unit transfer of finished goods among exporting units. Sub-contracting without limit on variety and quantity is allowed between tariff area and the zone subject to payment of duty on value addition. EPZ manufacturers will be treated at par with bonded manufacturers in tariff area for any future incentives to be announced for exporters.
According to the schedule, sale of obsolete/old machinery and defective/waste goods can be sold in domestic market of Pakistan subject to payment of applicable duties and taxes. Vehicles can be disposed of in domestic market after five years of use subject to payment of applicable duty.
The GSP concessions given by various countries to imports from Pakistan would be available to manufacturers in the zone, the agreement added. It is important to mention a memorandum of understanding (MoU) was signed between the government of Pakistan and Al-Tuwairqi Group of Companies on May 28, 2004 for setting up Tuwairqi Steel Mills at Karachi with production capacity of one million tons billets per annum.
Under the MoU, the government of Pakistan undertook provision of certain services and facilities. A facilitation agreement between the Port Qasim Authority (PQA) and Tuwairqi Steel Mils was signed on August 23, 2005.
Comments
Comments are closed.