The concessions of customs duty under SRO565(1)/2006 to inputs of 19 products having import value below Rs 30 million annually are proposed to be withdrawn in budget (2015-16). The FBR's proposals relating to the withdrawal of concessions pertaining to customs duty in budget (2015-16) revealed that the extent of concessions on inputs to 17 products is proposed to be reduced under SRO565(1)/2006.
Inputs of 16 products, categorized as non-essential, are proposed to be brought under normal customs tariff rates. Concessions to inputs of 7 products are recommended to be retained at rates specified against them. Under Fifth Schedule to the Customs Act, 1969 (Part-I), customs duty concession to 3 sectors having import value below Rs 30 million annually is proposed to be withdrawn. Further, extent of customs duty concession to 2 sectors is proposed to be reduced.
Under Fifth Schedule to the Customs Act, 1969 (Part-III), customs duty concession on 17 imported items used in poultry and livestock sectors is proposed to be retained at enhanced rates. The concessionary customs duty rates are proposed for PET resins. Further, PET resins of yarn grade and film grade, being identical in nature, are proposed to be classified under single PCT code 3907.6010.
There is a nominal difference of only 1% customs duty between tariff and concessionary rates on certain textile items. It is proposed that such items be placed under tariff rates. Concessionary rate of customs duty on import of fresh and dry fruits from Afghanistan is proposed to be increased from 5% to 10%. Under, SRO 678(I)/2004, E&P sector avails duty and tax concessions under this SRO on import of plant, machinery and vehicles. Following measures are proposed: Exemption on import of vehicles (4x4 twin cab) by E&P and service companies be withdrawn; exemption/concession on imports by sub-contractors be withdrawn and retention period of goods on import-cum-export basis by E&P sector be fixed for 5 years and further extension be linked to payment of 1 percent annual surcharge.
SRO 811(1)12004 exempts customs duty on import of polyethylene and polypropylene granules for manufacture of mono filament yarn and net cloth. This exemption is proposed to be withdrawn. Under SRO 559(1)/2008, this SRO provides concessionary rate of customs duty on input for toilet soap industry. The concession is proposed to be withdrawn. The maximum rate of 25 percent customs duty is proposed to be reduced to 20 percent. This will also reduce the number of general tariff slabs from 6 to 5 in Pakistan Customs Tariff.
In order to improve documentation and assessment, 1% customs duty slab was introduced last year. It is proposed that 1% customs duty slab in Tariff be substituted with 2% customs duty slab.
Networking equipments (PCT codes 8517.6100, 8517.6290 and 8529.1090) attract 20% customs duty whereas networking equipments classifiable under PCT code 8517.6990 are chargeable at 10 percent customs duty. New rates are proposed to be levied on these networking equipments to eliminate misuse. Import of tyres for cars, light trucks and heavy trucks attract following rates of customs duty: Car tyres 25 percent; light truck tyres 20 percent and heavy truck tyres 5 percent (0 percent under FTA).
High duty rate on car tyres encourages smuggling whereas light truck tyres are being misdeclared to avail lower duty rate for tyres of heavy truck. In order to harmonize duty structure on these categories of tyres, it is proposed that duty rate on car tyres (PCT code 4011.1000) and light truck tyres (PCT code 4011.2010) be reduced to 15 percent and regulatory duty at the rate of 10 percent be levied on heavy truck tyres. Coal attracts 1% customs duty. Since all other fuels attract higher duty rates, it is proposed that customs duty on Coal (PCT code 2701.1200 and 2701.1900) be increased from 1 percent to 5 percent.
Portland cement attracts 1 percent customs duty whereas other cements are subject to 20 percent customs duty. Surge in import of Portland Cement is hurting local industry. To protect local industry, it is proposed that customs duty on Portland Cement (PCT code 2523.2900) be increased from 1 percent to 20 percent. Grinders, mixers, juice extractors, etc, attract 25 percent customs duty and 5 percent regulatory duty whereas parts thereof are at 10 percent customs duty. In order to avoid higher rate of duty, ie, 30 percent, the importers prefer to import these appliances in parts in different consignments. It is proposed that customs duty may be increased on parts (PCT code 8509.9000) from 10 percent to 20 percent to eliminate misuse.
Linear alkyl benzenes is a raw material for manufacturing of sulphonic acid. At present it attracts 5 percent duty in tariff and 0 percent under concessionary SRO. Since concessionary rate on raw material under SRO is being withdrawn, it is proposed that customs duty on linear alkyl benzenes (PCT 3817.0000) be reduced from 5 percent to 2 percent to protect local industry.
Non-ionic surface active agents (PCT code 3402.1300) attract 20 percent customs duty whereas its finished products eg SLES (PCT code 3402.1190) are also at 20 percent customs duty which creates tariff anomaly. It is, therefore, proposed that customs duty on Non-ionic surface active agents (PCT code 3402.1300) be reduced from 20 percent to 15 percent.
On recommendation of Engineering Development Board (EDB), customs duty rates on aluminum wire (PCT code 7605.2900) and aluminum sheets (PCT code 7606.9290), being intermediary products for various sectors of industry, are proposed to be reduced from 20 percent to 15 percent.
On the recommendation of Engineering Development Board (EDB), customs duty rates on master batches are proposed to be increased from 10 percent to 15 percent on PCT code 3206.4990 and from 15 percent to 20 percent on PCT code 3206.4910 to protect local industry. On recommendation of Engineering Development Board (EDB), customs duty rates on polymers of styrene (PCT code 3903.1990 and 3903.9000) are proposed to be increased from 5 percent to 10 percent to protect local industry.
Ball Bearings (PCT code 8482.1000) attract 5 percent customs duty whereas other bearings falling in other sub-headings of PCT code 84.82 are subject to 10 percent customs duty which creates tariff anomaly. It is proposed that customs duty on ball bearings (PCT code 8482.1000) be increased from 5 percent to 10 percent. Loudspeakers (PCT codes 8518.2100 & 2200) attract 20 percent customs duty whereas loudspeakers falling in PCT code 8518.2990 are subject to 15 percent customs duty which provides incentive for misdeclaration. It is proposed that customs duty on loudspeakers (PCT code 8518.2990) be increased from 15 percent to 20 percent.
Tennis balls are classifiable under two PCT codes 9506.6100 and 9506.6950. It is proposed to delete the duplicate PCT code 9506.6950. Ethylene (PCT 2901.2100) is a raw material for manufacturing of PVC resin and is subject to 5 percent customs duty. It is proposed that customs duty on this raw material be reduced from 5 percent to 2 percent to support local industry. On the recommendation of Engineering Development Board (EDB), PCT codes of new localized auto parts of five vehicles are proposed to be created/amended in tariff for inclusion in SRO 693(1)12006 for levy of additional customs duty to protect the local manufacturers.
3-D Printer is a new technology and prior approval from Ministry of Interior is required for its import. Presently there is no specified PCT code for this item. It is proposed that a new PCT code be created to regulate its import: "84798960 - - - 3D Printers 15 percent"
Tubular day lighting device (TDD) is an emerging product for energy conservation. Presently there is no specified PCT code for it. Alternate Energy Development Board (AEDB) has recommended exemption of customs duty on import of this item. It is proposed that a new PCT code be created and customs duty be also exempted. "8539.3930 - - - Tubular day lighting device 2 percent" Compressor scrap is imported in substantial quantity. Io capture correct statistical data it is proposed that a specified PCT code be created for it as under: "7204.4940 - - - Scrap of compressor 2 percent"
Special classification provision 9918 provides facility for the industrial concerns to get repaired the imported machinery and equipment outside the country by paying customs duty on the repaired cost. There is no such facility for getting vehicles repaired outside Pakistan. It is proposed that vehicles be added in this scheme. The regulatory duties were levied on many steel products to protect local industry from effects of decrease in international prices and increased imports under FTA. However, it created certain distortions in steel chain items. Corrective measures are being taken as Federal Government is empowered under the law to impose, increase, decrease or withdraw regulatory duty during financial year.