Thursday January 20, 2022

FBR allows duty-exempted plants to be resold

May 29, 2018

KARACHI: Imported plant and machinery will remain subject to duty concessions even after change in ownership from one to another export-oriented unit under new rules, customs officials said on Monday.

The officials said the Federal Board of Revenue (FBR) allowed export-oriented units (EOU) to sale or transfer plant and machinery to another exporter. Such equipment is subject to exemption and concessions under export-oriented Small and Medium Enterprises Rules, 2008. But, the government previously prohibited resale or transfer of such duty-exempted plant and machinery.

The officials said the FBR amended customs law to allow the collector of customs for sale or transfer of plant, machinery, equipment and apparatus from one EOU to another EOU.

A manufacturer submits a security at the customs against the import of machinery at concessionary rates. “Any sale or transfer shall be subject to replacement of security and indemnity bond for the remaining period for which the earlier security was submitted,” a customs official said. The FBR also amended rule related to the disposal of goods in local market by the EOUs.

Under the amended rules, the local sale of goods may be allowed on the payment of duties and taxes applicable at the time of import along with payment of surcharge against Karachi interbank offered rate plus three percent per annum to be calculated from the date of import of input goods.

The FBR, however, said the quantity of input goods for local sale should not be more than 10 percent of the total imports during a year. The FBR also introduced penalty in case of shortfall in export limit under concessionary regime.

The customs officials said if export shortfall is up to five percent the FBR will recover duty and taxes to the extent of input goods.

Customs officials said if export shortfall is over 10 percent then the amount of surcharge would be recovered at Karachi interbank offered rate plus five percent per annum along with other applicable charges.