Acceding to demand of the electric fan industry, Federal Board of Revenue (FBR) has withdrawn 10 percent Customs duty on the import of electrical silicon steel sheet.
Industry sources told Business Recorder on Saturday that the FBR with a view to minimising cases of mis-declaration at the stage of import had imposed 10 percent Customs duty on Silicon and Alloy steel in the current fiscal year budget (2014-2015) and the same was notified under the First Schedule of the Customs Act, 1969, making it effective from July 1, 2014.
Electrical silicon steel sheet (cold rolled), falling under H.S Code No 7225-1900 and 7226-1900, is the major raw material for manufacturing electric fans (Rotor + Stator) and previously was being imported into Pakistan on zero rated Customs duty.
However, the imposition of custom duty on electrical silicon steel sheet directly hit the electric fan industry and it was apprehended that there would be massive decline in exports as these sheets are used for manufacturing quality fans.
Later, the representatives of Pakistan Electric Fan Manufacturers Association (PEFMA) held meetings with Federal Finance Minister Muhammad Ishaq Dar and Federal Commerce Minister Khurram Dastagir and senior Customs officials to get this duty withdrawn.
"On the demand of electric fan industry, FBR has announced to remove the Custom duty on import of non-grain-oriented electrical steel sheet HS Code 7255.1900 and now the industry can continue duty free import of this raw material. However, FBR has reduced duty by 50 percent to 5 percent on steel sheet HS Code 7226.1900", said PEFMA''s former president and GFC Fan''s CEO, Mohammad Ilyas.
He said that industry mainly consumed non-grain-oriented electrical steel sheet HS Code 7255.1900 for manufacturing fan and the entire duty on it has been withdrawn.
The FBR in exercise of powers conferred under Section 19 of the Customs Act, 1969 (lV of 1969) has also issued S.R.O. 565 (l) 12014, to amend the previous notification, he added.
Ilyas said that the export of Pakistan''s electric fans was continuously increasing and domestic fan industry had earned a foreign exchange of $40.35million during FY14 as compared to $38m in FY13, thereby depicting an increase of seven percent. In terms of volume, the industry has exported some 1.8m units of electric fan in FY14 up from 1.79m units.
He said that although fan industry has been facing a tough competition with other exporting countries such as China, India, Malaysia, Thailand, Taiwan and Vietnam, it following withdrawal of the duty on silicon steel sheet was expecting export of over two million fans during this fiscal year. He also lauded the efforts of federal finance and commerce ministers and the officials of FBR in getting resolved this issue on priority.