The Central Board of Revenue (CBR) has clarified that import and supply of raw material, components, sub-components and parts used in the manufacture of zero-rated plant and machinery shall be charged to sales tax at the rate of zero percent under SRO 527(I)/2005.
In a clarification issued to Siemens Pakistan Engineering Co Ltd, Karachi, the CBR has further clarified that the condition No (b) of SRO.527(I)/2005 shall apply in those cases only where import is regulated through any concessionary or survey related Notification issued under section 19 of the Customs Act, 1969. However, if import is not regulated by any such notification, the same shall still be charged to sales tax @ zero percent, if otherwise qualify for zero-rating under SRO 527(I)/2005.
It may be recalled that the condition (b) of SRO 527(I)/2005 has specified that in case of imported components, sub-components and parts, all conditions, restrictions, limitations and procedures as are prescribed in a notification under section 19 of the Customs Act, 1969 (IV of 1969), shall apply.
The CBR has communicated the decision to the Collector of Customs, Appraisement and Preventive, Customs House, Karachi, for implementation.