The Federal government is to rationalise tariff on hundreds of imported items in the 2009-10 budget, as per proposals submitted by the Port Qasim Authority (PQA), well-informed sources in Federal Board of Revenue (FBR) told Business Recorder on Saturday.
The sources said in preliminary inter-ministerial deliberations, being held in the FBR, most of the recommendations forwarded by the PQA were considered logical. The sources said food supplements, containing vitamins and other products and classified under PCT heading 2105.9090 were attracting 35 per cent duty and 15 percent regulatory duty (RD); whereas medicaments, containing vitamins under PCT heading 3004.5090 have 10 percent duty.
According to sources, the government is considering rationalising duty on both the heads to avoid classification disputes. Further, the RD is also expected to be abolished on the headings, being a product related to health and well being. According to sources, heading 3208 covers paints and varnishes based on synthetic polymers; there is a logical scheme of sub-headings for various bases.
But sub-heading 3208.1010 is misplaced as ''polyamides,'' which are different from'' polyesters. The heading, therefore, is likely to be deleted and created at the end ''other'' as follows: 3208.9020 based on polyamides, varnishes and others at 10 per cent CD. The duty slab on sulphonic acid (soft) type is at 10 per cent. On the other hand, if the goods are found of hard type, the same are classifiable under heading 3402.1190 chargeable to customers duty at 20 per cent.
Soft/hard always creates disputes. It is being considered that duty on both the types may be rationalised. The duty slab on calcium carbonate (coated) is at the rate of five per cent. On the other hand, if the goods are calcium carbonate (treated), the same are classifiable under heading 3824.9099, which represents ''others'' chargeable to customs duty at 10 per cent.
It always creates dispute on the aspect of coated/treated. The FBR has been proposed that the duty slab on both the types may be rationalised by adding word coated/treated under heading 3824.9094. All the sub-headings under PCT heading 5603 "non-wovens, whether or not impregnated coated, covered or laminated" are liable to customs duty at 15 per cent except for sub-heading 5603.9200 at 20 per cent.
It has been proposed that duty may be rationalised on all sub-headings of this PCT heading to avoid classification disputes and to avoid misdeclaration. All the headings of steel sheets have been divided into two categories, ie secondary sheets: 20 per cent duty; and prime sheets: 10 per cent duty.
This heading has not been divided on this pattern. Therefore, there is a possibility of clearance of secondary sheets of other headings, attracting 20 per cent duty in this heading. It has been proposed that heading may be sub-divided as "plated" or "coated" with chromium oxides or with chromium and chromium oxides, ie 7210-010 (secondary quality 20 per cent and 7210.5090 and others 10 per cent).
Rate of duty may be rationalised on cold rolled steel strips of thickness below 0.5 mm and upto 100 mm-wide under sub-heading 7211-1910 as in all other sub-headings, the consecutive order of the duty is 10 per cent on standard/quality thus rate of duty in this sub-heading should be 10 per cent. Customs duty on other primary quality flat rolled products like CRC/Gp/TFS is 10 per cent and it is very difficult to distinguish silicon-electrical steel sheets from these sheets. Hence, difference in duty rate has raised chances of misdeclaration.
It has been suggested that the customs duty under this heading may be raised to 10 per cent. However, concerned industrial sectors, ie fan and transformer manufacturing industries, may be exempted from levy of customs duty by specific SRO 567.
According Port Qasim, the PCT heading 73.11 covers "containers for compressed or liquefied gas, of iron or steel" with two sub-heading "for CNG" and for "LPG". It has been suggested that a new three-tariff line as '' other'' be added to cover classification of iron or steel containers for compressed or liquefied gas, other than CNG and LPG.
Other geared pumps'' under PCT 8413.8110 attracts the customs duty at five per cent whereas some geared pumps are given PCT 8413.6000 "other rotary positive displacement pumps'' attracts customs duty at 20 per cent, creating room for misdeclaration. Duty on PCT 8413.8110 is expected to be enhanced to 20 per cent to rationalise the rates.
Casings (with or without) power supply to computers: The words, "(with power supply" may be changed with words "with or without power supply" so that casings without power supply to the computers could also be classified without dispute. A new three-heading be created under 84.73 for racks/ stand specifically meant for computer servers. This will help in reducing the dispute of classification of such specialised racks.
The LED panels have variety of functions. They can be used as indicator panels as well as monitor for moving images used for advertising purposes. Simple indicator LED panels are classified under PCT 8531.2000(five per cent CD), while those having the capacity to display images are classified under PCT 8528.5900(25 per cent CD). There is invariably dispute regarding classification of LED panels due to substantial difference in rate of duty. Therefore, the FBR is expected to equalise duty on both headings.
Magnetic contractors/ thermal protectors classifiable under heading 8536.9030 of a kind used in motors attract 10 per cent duty whereas electrodes for ''other'' purpose classifiable under heading 8536.9090 are subject to 20 per cent to avoid classification dispute.
The FBR is said to be considering enhancing duty up to 20 per cent against the PCT heading 8536.9030. The government is also expected to reduce duty to zero per cent on processors and controllers, whether or not combined with memories, converter logic circuits, amplifiers, clock and timing circuits or other circuit checks.
Electronics classifiable under heading 8545.1100 of a kind used for furnaces attract five per cent duty whereas electrodes for ''other'' purpose classifiable under heading 8545.1900 are subject to 15 per cent duty to avoid classification dispute, the FBR is expected to enhance duty to 15 per cent under heading 8545.1100.
Besides the foreign governments and foreign donor agencies, Pakistanis residing abroad as well as foreign nationals, in their personal capacities have contributed generously in relief activities in the earthquake-hit areas. It will be more appropriate if such donations are legalised/regularised by deleting the words "(by foreign government/agencies)" to broaden prospects of such donations.
Natural disasters can hit any area other than NWFP and Azad Jammu and Kashmir (AJK), therefore, the PQA proposed that the word "of NWFP and AJK" be deleted. Moreover, word "plant, machinery and equipment" may be substituted with words "plant machinery, equipment and prefabricated structures".
Different international donor organisations have been donating immediate housing facility in respect of damaged schools, dispensaries, hospital etc. For this purpose, they have been importing "pre-fabricated structure" by way of donation. In this backdrop, they are expected to get the customs duty exemption in tariff.
In the budget, the words "certificate from the Ministry of Health in proof thereof "is also likely to be inserted after the words "a" appearing for the second time and rest of the phrase afterwards may be deleted. Suggested change is recommended to minimise the misuse of the available concession.