SATURDAY OCTOBER 29: PCT, FTAs and PTAs: FBR to introduce over 1,000 major changes

ISLAMABAD: The government has decided to introduce over 1,000 major changes in the Pakistan Customs Tariff (PCT), Free Trade Agreements (FTAs), Preferential Trade Agreements (PTAs), auto tariff regime, exemption/concessionary notifications and duty drawback/trade policy notifications to bring Pakistan's customs notifications/PCT etc in line with the revised HS Code-2012 of the World Customs Organisation (WCO).
Sources told Business Recorder here on Friday that the HS Code is 'Harmonised Commodity Description and Coding System'. The FBR has finalised a plan for implementation of WCO's revised HS nomenclature HS-2012. These changes would be of technical nature, which would have nothing to do with the revision in the rates of customs duty. The exercise would not have any revenue impact as it would not change the rates of customs duty or tariff rationalisation. By bringing Pakistan's HS Codes in line with the WCO revised HS Code-2012, the government would only make technical changes in the Pakistan Customs Tariff, import notifications and customs notifications etc.
At present, the 2007 version of the HS-Code is applicable, and WCO revises the HS codes after every five years, in view of technological advancements. Now, the new 'HS Code-2012' would be enforced from January, 2012. To avoid any mistakes, or change, in the rate of duty, the Federal Board of Revenue (FBR) has requested relevant government departments to constitute 'Task Forces' and 'Working Groups' to align their notifications in line with the WCO's revised HS Code-2012, sources said.
The WCO has notified revised HS Nomenclature HS-2012, effective from January 1, 2012. Consequently, the FBR has started the exercise for implementation of HS-2012 from next fiscal year. In this periodic revision by WCO, the entire HS Code structure is revised in view of technological and trade developments.
Under the revised WCO's tariff regime, the HS-6 changes have been made at over 300-500 places, which would result in national changes at HS-8 (PCT Codes) at numerous places. The Explanatory Notes to Chapters 1-97 of the Pakistan Customs Tariff are also revised. The corresponding changes at national level to be incorporated include HS-8 (PCT Codes) structure is revised at more than a thousand places, and tariffs to be adjusted/rationalised.
To bring Pakistan's HS Codes at par with the WCO's revised HS Nomenclature HS-2012, the FBR will revise all FTA/PTA lists, auto-sector tariff regime, defined by EDB; exemption and concession notifications and duty drawback notifications. In consultation with the Ministry of Commerce, the FBR will also amend the Trade Policy's notifications and appendices (ie India list, banned and restricted lists and others).
The FBR will also bring changes in the sales tax regime, especially the Sixth Schedule of the Sales Tax Act and zero-rating and valuation notifications. Other changes will be made in the income tax, especially commodity-related exemptions, mentioning HS Codes; Valuation Databases and statistical Systems (reports/queries).
Under the FBR plan, the main deliverables include preparation of revised tariff structure (PCT Code 2012 and descriptions) and corresponding amendments in regulatory notifications. Moreover, the FBR will disseminate stakeholders the WCO's HS-2012 and national PCT Codes. The training and orientation of stakeholders is also part of the implementation of the revised HS Codes from July 1, 2012.
Sources said that the FBR would involve stakeholders in the work including internal and external and trade. The internal stakeholders include Model Customs Collectorates and external stakeholders included EDB, Ministry of Commerce, Ministry of Food and Agriculture (MINFAL), Federal Bureau of Statistics (FBS), importers, exporters and customs agents.
Sources said that the FBR has informed the stakeholders to complete the work latest by end-February, 2012, before start of next budget-making exercise. Under the action plan of the FBR to be implemented before July 1, 2012, the FBR will develop Correlation Tables at HS-8 of the PCT. The FBR will obtain relevant literature on HS-2012 Nomenclature.
The Board would also form an HS-2012 Working Group of officers, comprising competent experienced Principal Appraisers and Appraisers to develop HS-8 level tables. A senior officers' team would review (HS-2012 Review Team) work done by working group, headed by the Collector. The assignment would be completed by International Customs Section, FBR and MCC Appraisement Karachi by end of November, 2011. The document would be reviewed and finalised by December 15, 2011.
For the preparation of corresponding amendments in notifications, the Appraisement's HS-2012 working group would review the exemption and PTA/PTA notifications, duty drawback notifications, customs rules and customs general orders upto January-2012. All customs officers and stakeholders will need training and orientation on the new HS-2012, develop plan for training. The Director General Training and Research will co-ordinate with MCC Appraisement for Master Trainers/Resource Persons.
The Ministry of Commerce would review the Trade Policy; EDB/M o Industries Auto Sector Regime. Sales Tax Wing FBR will also review the Sales Tax (Schedules and notifications). The Income Tax Wing will review the Income Tax (Schedules and notifications) and Pakistan Standards and Quality Control Organisation (PSQCA), Minfa and others government departments would review the standard and certification agencies for imports and exports.