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  • Jul 15th, 2017
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The government has not incorporated budget proposals (2017-18) of the Engineering Development Board (EDB) on rationalisation of customs duty of vehicles by adjusting duty as per Automotive Development Policy (2016-21).

In a written brief to the National Assembly Standing Committee on Finance here on Friday, the Ministry of Industries and Production said that out of nine proposals of the EDB pertaining to the Fifth Schedule of the Customs Act 1969, relief has been provided in three proposals. Out of five proposals on the amendments to Fifth Schedule of the Customs Act 1969, no proposal was incorporated in budget (2017-18).

The proposals of the EDB pertaining to the creation of new Pakistan Customs Tariff (PCT) headings regarding traction pinion and gears of locomotives were not incorporated in budget (2017-18). The new PCT were not created for SUV 1000cc to 1500cc & 1500cc to 1800cc in budget (2017-18).

Under the proposed amendments in Fifth Schedule of the Customs Act 1969, the brief justification/rationale of the EDB for proposed change was that "flux" falling under PCT heading imported by us is denied exemption on the plea that the flux (PCT heading No. 3810.1000) imported by us in liquid form, whereas under the abovementioned schedules, the word "liquid' is not mentioned in these schedules though the PCT heading is the same if it is in solid form or liquid form.

The EDB recommendation was that the description to be changed from flux to "flux (in any form)" at Sub Serial (v) of 7(b) of Serial No. 21 of 5th Schedule Customs Act 1969. Brief justification/rationale of the EDB for proposed change was that "junction boxes and covers" falling under PCT heading No. 8538.9090 which are used for solar panels but the Customs authorities contend that the said item is hit by CGO No. 12/2002 though the PCT heading given in the said CGO is different and is not incorporated in the said CGO.

The EDB recommendation revealed that description to be changed from junction boxes and covers to "junction box & cover for solar panel" at Sub Serial (vii) of 7(b) of Serial No. 21 of the 5th Schedule Customs Act 1969. Brief justification/ rationale of the EDB for proposed change was that sheet mixture of paper and plastic (PCT heading 3920.9900) is also covered under the above schedules, but its exemption is sometimes denied on the pretext that the goods contain the words TPT, PET, TPE, which words do not, at all, restrict the import to claim exemption because these are "sheet mixtures of paper and plastic" to be used for the manufacture of solar panels.

The EDB recommendations revealed that the description to be changed from sheet mixture of paper and plastic to "back sheet lamination film/sheet (TPT, PET, TPE)" at sub-serial (viii) of 7(b) of Serial No. 21 of 5th Schedule Customs Act 1969. Brief justification/rationale for proposed change was that "ribbon for PV module made of silver lead" (PCT heading 7409.9000) is imported by us which is made of lead and is coated on the copper strips which are used for manufacture or Solar Panels and as such exemption so claimed cannot be denied.

The EDB recommendation disclosed that the description to be changed from ribbon for PV modules (made of silver & lead) to "photovoltaic ribbon" at sub-serial (ix) of 7(b) of serial No. 21 of 5th Schedule Customs Act 1969. Brief justification/ rationale of the EDB for proposed change was that EVA (ethyl vinyl acetate) sheet (chemical)" has been mentioned and the Customs authorities always stress that the description refers to some sort of chemical, whereas we are always intended to import raw-materials to be used for the manufacture of solar panel and EVA (ethyl vinyl acetate) so imported is always in the form of film/sheet and not in a liquid form.

The EDB recommendation revealed that description to be changed from flux to "ethyl vinyl acetate (EVA sheet/film)" at Sub Serial (xi) of 7(b) of Serial No. 21 of 5th Schedule Customs Act 1969. Justification is that Pakistan Machine Tool Factory (PMTF) is local manufacturer of traction pinions and gears of locomotives and has been supplying the same to Pakistan Railways (PR) for the last 25 years.

The EDB recommendation revealed that being a well established local public sector company new PCT for locally manufactured traction pinion and gears of locomotives up to 92 teeth @ 20 percent may be created under PCT 8607.9110.



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