The import of raw materials, components and sub-components for manufacture of air conditioners, under Sr No2 of the Table of SRO No565(1)/2006, dated June 5, 2006, is allowed in Completely Knocked Down (CKD) condition, but is not allowed in Semi-Knocked Down (SKD) condition.
Sources told Business Recorder here on Saturday that the FBR clarified the issue of concessionary rates of duty on the import of parts and components of microwave ovens to customs field formations. The FBR has referred to the earlier letter relating to the assessment of duty on the import of components and sub-components imported for the manufacture of air-conditioners under the same SRO.
According to sources, the issue can be categorised into two distinct issues, the first relates to import of components and sub-components in CKD condition while the other pertains to import of the same components & sub-components but in SKD condition. The first issue had been earlier examined in the Board in the light of Collector, MCC, Appraisement's letter in 2009 and an EDB letter of 2010.
A meeting was also held in the FBR in 2010 with stakeholders to examine the issue holistically to facilitate the bona fide industrial sector. This issue, however, got mixed up with that of SKD imports also being made with claim of concession, under the said Sr.No2 of SRO No 565(1)/2006, hence no clear policy directive could be issued.
As far the first issue is concerned, the considered policy of the Board is as under: Firstly, the import of raw materials, sub-components and components under concessionary regime of Sr. No2 of Table of SRO No 565(1)/2006, shall strictly be allowed to the units having sufficient in-house facilities, as listed at Special condition (A) in Column (6) of the said Table.
Secondly, the assemblers shall import all sub-components and components as listed in the Sr.No 2 Column (3) of SRO.565(l)/2006, in separate and identifiable form (CKD) as per Special condition (B) in Column (6) of the said Table. Thirdly, the import of raw materials, sub-components and components not mentioned in the list in column (3) against Sr. No2 of said Table shall be assessed in their own respective headings at the statutory rate of duty, if imported in separate and identifiable form irrespective of the number of bills of lading.
The rule 2(a) of GIR shall not be applied on such shipments as it will defeat the purpose of concessionary regime provided to bona-fide importer-cum-manufacturers. The benefit of any FTA shall also be admissible subject to fulfilment of legal formalities. Fourthly, all components / sub-components of concessionary as well as Tariff regime can be imported against one bill of lading but they must essentially be in CKD condition ie separately packed and in identifiable form.
Fifthly, the concession available under Sr.No 2 of the Table of SRO 565(1)/2006, for import of sub-components and components for the manufacturing / assembling of air conditioners is irrespective of import of raw materials, ie, it is not mandatory for the importer-cum-manufacturers to import raw materials simultaneously with sub-components and components for availing the benefit of the said SRO.
Sixthly, the field formations are accordingly directed to adhere to the above policy and not to impede bona fide imports by importers-cum-manufacturers who are eligible under the conditions specified in Column (6) against Sr. No 2 of the Table of SRO 565(1)/2006, on the grounds of application of rule 2(A) of GIR. Sources said that the second issue regarding imports made in SKD condition with claim of concession against Sr.No2 of the SRO No 565(I)/2006, is already being examined by the Committee constituted by the Board vide its letter C.No 1(29)Survey-1/2005/160057-R dated December 14 last year and shall be dealt with on receipt of its report.
Sources said that the matter has already been clarified by the Board in the context of components and sub-components imported for the manufacture of air-conditioners, under Sr. No 2 of the Table of SRO 565(1)/2006. The same principle shall be applied to the components, sub-components, not mentioned in the list in column (3) against Sr. No83 (ii) of the said Table and shall be assessed in their own respective headings at the statutory rate of duty.
As Serial 83(ii) of the said SRO allows concessionary imports of components /sub-components in SKD condition, SKD kits not mentioned (omitted) in SRO, shall also be assessed in their own respective headings at the statutory rate of duty. The benefit of FTA shall also be admissible to these imports, subject to fulfilment of relevant legal formalities. The rule 2(a) of GIR shall not be applied on such shipments as it will defeat the purpose of concessionary regime provided to bona fide importer-cum-manufacturers.