Customs directed to clear stuck imports destined for tribal areas

ISLAMABAD: The government has directed customs authorities to clear imported cargoes destined to the erstwhile federally and provincially-administered tribal areas under a special tax treatment, it was learnt on Tuesday.

Federal Board of Revenue Chairman Javed Ghani directed customs authorities to release stuck-up containers against postdated cheques and sent to their destinations (Fata/Pata) under standard tracker mechanism.

The decision was taken during a meeting with Inland Revenue Operations and Customs Operations Wings to sort out the issues of imported goods of Fata/Pata residents stuck-up at Karachi Ports, consumption/installation certificates, postdated cheques and exemption certificates under section 148 of the Income Tax Ordinance 2021.

The meeting decided a mechanism for the release of consignments.

In 2018, the government formally announced the merger Fata and Pata with the Khyber Pakhtunkhwa province. No sales tax and income tax will be levied in the Fata till 2023.

Though the tribal areas are subject to all acts of parliament as part of a province, the government decided to continue certain concession and immunities to persons and entities in Fata and Pata, including exemption of income tax on profits and gains of existing businesses conducted by individuals for a period of five years. These businesses, however, need to be registered with the FBR by 30th September, 2018 and exemption from sales tax to the retailers to facilitate the general consumers. Domestic consumers of electricity would be exempted from sales tax on domestic consumption of electricity.

It was decided in the meeting that the Collector Customs (Enforcement and Compliance), Peshawar, would issue detention orders of the raw materials effective from day the consignment reaches the manufacturing premise of importers.

“The importer/manufacturer will be responsible to take the import documents along with detention order to the CIR [Commissioner Inland Revenue] Corporate Zone, RTO [Regional Tax Office], Peshawar and make arrangements to have the manufacturing premises/raw material/machinery/goods imported verified,” said an official document.

“The CIR Corporate Zone, RTO, Peshawar will be liable to verify/undertake physical visit as conducted by the importer/manufacturer to the manufacturing premises where the goods are kept under detention, and allow the raw material to be consumed/utilized in writing. The CIR, Corporate Zone, RTO, Peshawar will ensure the monthly stock-taking of the raw materials to consumed in the production of manufactured goods by these manufacturing units.”

The stock-taking will facilitate in issuance of the consumption certificate under S.No.151 of the sixth schedule of the Sales Tax Act 1990. The residents of Fata/Pata will apply for tax exemption certificates under section 159 of the Income Tax Ordinance, 2001 for the import of raw material/machinery in light of the Peshawar High Court decision in November last.

“Commissioner Corporate, RTO, Peshawar and Collector Customs (Enforcement and Compliance), Peshawar would keep a close liaison to successfully implement the laid down mechanism,” the document added.