The Central Board of Revenue (CBR) has restored the tariff protection for certain local sectors through amendments in the Finance Bill (2007-2008). Sources said on Saturday that the National Assembly has approved these changes in the Pakistan Customs Tariff (PCT) to facilitate the local industries.
The CBR has also abolished the condition of submitting financial securities like bank guarantees and post dated cheques by the local oil refineries on import of crude palm oil to simplify the import procedure.
The government has allowed customs duty exemption on import of three raw materials of the ceramics industry of the country. Previously, China clay, luster powder and sedentary phosphate, the important raw materials of the ceramic industry were chargeable at higher rate of customs duty of 5 percent and above. Through, amended Finance Bill 2007, the import of China clay, luster powder and sedentary phosphate has been made duty free.
Customs duty on the import of parts and other raw materials for manufacturing of electricity meters was reduced from 25 percent to 15 percent in budget.
Following a presentation of local manufacturer, duty on import of parts and other raw materials for manufacturing of electricity meters has been increased from 15 percent to 25 percent to protect the local industry.
Duty on the import of two types of chemicals, ethyl acetate and butyl acetate, was brought down from 25 percent to 20 percent in the budget. Later, duty on these chemicals has been again increased to 25 percent.
In budget, duty was reduced from 20 percent to 5 percent on import of silicon cilete sealant, a raw material used for the insulation and air ducting. The higher rate of duty was again restored at the rate of 20 percent on this item through amendment in the Finance Bill (2007-2008).
Customs duty on import of pet bottle grade resine was lowered from 10 percent to 5 percent in the budget, but to protect the local industry this rate has been increased from 5 percent to 7.5 percent. However, this 7.5 percent would be imposed through a SRO, as 7.5 percent rate is not available in the Pakistan Customs Tariff.
Customs duty on import of tin plate and steel sheets have been reduced from 25 percent to 20 percent which is mainly used for preparation of ghee and cooking oil industry for tin packing. Now the customs duty on tin plate and steel sheets have been categorised in two rates, the rate of customs duty on import of secondary tin plate and steel sheets have been reduced from 25 percent to 20 percent and from 25 percent to 10 percent on primary grade tin plate and steel sheets.
Through another amendment in the Finance Bill, sources said that the income of the regulatory authorities, corporation, companies, development authorities, other bodies or institutions set up, owned and controlled either directly or indirectly by the federal government or a provincial government would become taxable from 2007-2008.
The income of Oil and Gas Regulatory Authority (Ogra), Pakistan Electronic Media Regulatory Authority (Pemra), Pakistan Telecommunication Authority (PTA), National Highway Authority, National Electric Power Regulatory Authority (Nepra), Civil Aviation Authority (CAA) would become taxable with effect from July 1, 2007. Similarly, the income of Capital Development Authority (CDA), Lahore Development Authority (LDA), Karachi Development Authority (KDA), Defense Housing Authority (DHA), Port Qasim Authority and other development authorities in the country has also become taxable from next fiscal year.
Sources said that that under section 49 of the Income Tax Ordinance 2001 exemption from income tax was available to the said entities of the federal as well provincial governments. An enabling sub section 4 in section 49 of the Income Tax Ordinance 2001 has been inserted through Finance Bill 2007 for withdrawal of the income tax exemption available to these entities from next fiscal.
The sub-section 4 inserted in section 49 of the Income Tax Ordinance states "Exemption under this section shall not be available in case of corporation, company, a regulatory authority, a development authority, other body or institution established by or under federal law or a provincial law or and existing law or a corporation, company, regulatory authority, a development authority or other body or institution set up.
Owned and controlled, either directly or indirectly, by the federal government or a provincial government, regardless of ultimate destination of such as laid down in Article 165A of the Constitution of Pakistan."
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