Availing exemption from RD: Importers of motor spirit fail to establish presence of consignments on the high seas

LAHORE: Importers of motor spirit have failed to establish presence of their consignments on the high seas to avail benefit of exemption from regulatory duty (RD) on their consignments/cargo.

They had sought benefit of SRO 806(1)/2022 dated 20.06.2022 thereby not liable to pay RD on their consignments/cargo of “motor spirit”.

It may be noted that import of motor spirit was subjected to levy of customs duty vide First Schedule to the Customs Act, 1969, till 30.06.2022. By Finance Act, this levy was omitted and its imports since 01.07.2022 are not subject to levy of customs duty.

This however replaced by regulatory duty at the rate of 10 percent to be charged on its import. Cushion of exemption from such RD however was provided to those imports for which LCs were already established or the consignments were already on high-sea before 20.06.2022.

To implement such decision of federal government, the revenue division had issued a notification under section 18 of Customs Act, 1969, as SRO No.806 (I)/2022, which is to remain in force till 30th day of June, 2022.

This was superseded by SRO No.966(I)/2022, which levied regulatory duty on the import of goods including the subject goods (motor spirit) identified at Sr. No. 128 of the subsequent SRO prescribing rate of regulatory duty of 10 percent.

The importers were of the stance that the subject import of consignment has fallen in the later part of SRO 806(1)/2022. They had relied upon the contracts they entered with the consignor and the bill of ladings issued by the shipping agency on behalf of master of vessel.

However, the department disputed their stance on the touchstone that bill of lading relied upon is from the master of vessels would turn nothing as far as independent transaction between buyer and supplier is concerned. Presence of vessel in the high seas alone does not demonstrate that it was there for petitioners.

The sources said these kinds of vessels are always available on the high seas waiting for a call from potential buyer but this arrangement would not be matured or seen as one within the spirit of protection provided in the subject SRO. Therefore, the importers are not entitled to the protection and benefit under the SRO, they added.

Copyright Business Recorder, 2023