The Central Board of Revenue (CBR) is planning to charge 10 percent uniform customs duty on the import of all items, which are locally manufactured, and 5 percent on all the raw materials not produced locally in Budget 2005-06. All collectors of customs have started a ''budget exercise'' to determine the locally manufactured or not locally manufactured items to finalise a new list for the purpose of levying duty. The tax authorities are seriously considering that all raw materials, which are not produced locally, should be charged to duty at the flat rate of 5 percent, and those produced locally should be kept at the rate of 10 percent.

In the next budget, the CBR has started examining baggage rules of neighbouring countries and customs tariff classifications of the textile sector applicable in United States, European countries, Mexico, Brazil, and India to simplify customs rules and procedure for the business community and overseas Pakistanis.

The new Pakistan Customs Tariff (PCT), 2005-06 will give information about the anti-dumping duty and banned/restricted items to make the tariff more informative for importers. A new export tariff rate will also be issued amending the previous one.

Official sources told Business Recorder on Saturday that the CBR has constituted ''budget committees'' comprising senior customs officials and collectors to finalise the budget proposals keeping in view the best practice in the neighbouring countries.

The CBR has given deadline of February 28, 2005 to the collectors of customs for the completion of the budget exercise. The customs authorities have also sought the viewpoint of collectors of sales tax on these issues.

TARIFF STRUCTURE FOR TEXTILE INDUSTRY: A committee comprising Collectorate of Customs (Appraisement), Customs House, Karachi; Model Customs Collectorate, Karachi, Collector of Customs (Exports), Custom House, Karachi; Collectorate of Customs, Lahore; Collectorate of Customs, Faisalabad; the Export Processing Zone (EPZ) chairman, and the Commerce Ministry has started studying tariff classifications applicable in developed countries.

Different countries have adopted seven, eight and above digit tariff classifications as per their own national requirements. There is a need to examine these levels of classifications of the major trading partners of Pakistan, including USA, EU, Mexico, Brazil, India, etc. This exercise may particularly cover chapter 50-63 (textiles) of Pakistan Customs Tariff (PCT). If found appropriate, the existing PCT classifications may be re-adjusted accordingly to facilitate the trade in Budget 2005-06.

AMENDMENT TO BAGGAGE RULES: Collectorate of Customs (Preventive), Karachi; Collectorate of Customs, Lahore; and Collectorate of Customs, Rawalpindi; have started evaluation of baggage rules under current requirements, categories of incoming passengers, and scale of allowances. This exercise has also included the examination of existing baggage allowances granted by the regional countries for amending the Pakistani rules in the budget.

DUTY STRUCTURE ON SMUGGLED ITEMS: A committee comprising Collectorate of Customs (Preventive), Karachi; Collectorate of Customs, Peshawar; and Collectorate of Customs, Quetta; have started work on the rationalisation of duty structure on smuggling-prone items. The CBR has decided to identify additional smuggling-prone items for the rationalisation of duty to discourage the smuggling incentive.

TARIFF HEADINGS AS PER WCO: Collectorate of Customs (Appraisement), Customs House, Karachi; Model Customs Collectorate, Karachi, and Rawalpindi Additional Collector (Customs) Javed Ghani have been given assignment to examine the WCO tariff nomenclature. Tariff nomenclature/headings as adopted by the WCO keep on changing from time to time. There is a need for synchronising the existing PCT/nomenclature with that of latest WCO version.

CONSOLIDATION OF CGOs: Collectorate of Customs, Port Muhammad Bin Qasim; Collectorate of Customs, Hyderabad; and Collectorate of Customs, (Appraisement), Karachi; have started consolidation of CGOs. In 2002, all the scattered CGOs were consolidated in one CGO. It requires examination in Budget 2005-06. Where needed the necessary changes may be made. Independent CGOs issued after 2002 will be made part of the main CGO to maintain the consolidation objective and convenience in consultation.

AMENDMENT TO CUSTOMS RULES: The CBR has given task of amendment to customs rules to Collectorate of Customs (Appraisement), Custom House, Karachi; Collectorate of Customs, Lahore; and Collectorate of Customs, Peshawar. The existing customs rules notified vide SRO 450(I)/2001 need proper examination. Wherever required necessary changes/amendments may be made. Where needed the relevant parts may be made computer compatible.

RECTIFICATION OF ERRORS IN SROs: Collectorate of Customs (Appraisement), Customs House, Karachi; Model Customs Collectorate, Karachi; and Collectorate of Customs, Rawalpindi; have started a study on the issue. There are around 40 operative customs notifications. Notifications, which have become redundant should be rescinded. During this study, it may also be determined as to how many customs notifications are still operative. On the basis of this study a consolidated picture may be developed. There are many typographical errors in the notifications, which will require corrections.

CHANGES IN TARIFF: A committee has been set up comprising Collectorate of Customs, Multan; Collectorate of Customs, Quetta; and Collectorate of Customs, Gujranwala. The CBR observed that the existing Volume 1 of the tariff does not include any column for inclusion of WHT, CE duty, banned/restricted items for import, concessionary/exemption rate of duty indication of international conventions/protocol as well as the information about the anti-dumping duty, etc.

In future, the published version of the tariff should include all these details. This study may be completed as per the existing situation. Necessary changes under the budgetary measures 2005-06 may be incorporated.

AMENDEMENT TO CUSTOMS ACT, 1969: Collectorate of Customs (Appraisement), Customs House, Karachi; Model Customs Collectorate, Karachi; Collectorate of Customs, Port Muhammad Bin Qasim; Collectorate of Customs, Lahore; and Collectorate of Customs, Rawalpindi; have started an exercise to determine the change in the Customs Act, 1969.

EXPORT TARIFF: The CBR has directed Collectorate of Customs (Exports), Karachi; Model Customs Collectorate, Karachi; Collectorate of Customs, Port Muhammad Bin Qasim; and Collectorate of Customs, Faisalabad; to examine the existing export tariff. The existing export tariff needs to be unified with the import tariff. There should be no difference in classification of items for import or export purposes.

ZERO-RATE OF DUTY: A three-member committee of Collectorate of Customs (Appraisement), Customs House, Karachi; Model Customs Collectorate, Karachi; has been constituted to study Chapter 99 of the Pakistan Customs Tariff (PCT). The existing SROs with zero-rate of duty may be transposed to Chapter 99. Accordingly, all PCTs where the rate of import duty is zero with at least a trade volume of Rs 5 million per annum may also be examined to take them to Chapter 99.

CLEARANCES UNDER CONCESSIONARY SROs: The clearances made while availing the concessionary duty under different SROs are required to be carefully audited by all the collectors. The summarised position (July-December 2004) shows that in many cases, the concessionary claimed rates are not available in the relevant SROs. This is a serious phenomenon, which warrants proper audits for amendment.

COMPUTER COMPATABILITY OF SROs: The CBR has conveyed to the Collectorate of Customs (Appraisement), Custom House, Karachi; Model Customs Collectorate, Karachi; Collectorate of Customs, Lahore; and Collectorate of Customs, Sialkot; Pakistan Revenue Automation Limited (Pral) that the existing SROs are not computer compatible. There are 18 concessionary customs notification which are mostly availed for this purpose. Thirteen out of these 18 SROs are without PCT codes, which make them non-computer compatible. Even the five SROs with notified PCTs are not conclusive. The use of "respective headings" is to be avoided. This issue needs to be sorted out. The PCT code may be determined in terms of existing trade flow. In future, no SRO should be issued unless the relevant PCTs are given.

EXPORT PROCESSING ZONES: A two-member committee has been formed, including Collectorate of Customs (Exports) and Collectorate of Customs, Port Qasim. In the current Trade Policy, a condition of 20:80 percent for exports to tariff area from the EPZ has been imposed. Units in the EPZ are agitating against this decision. A detailed analysis/study will be conducted to review this scheme for announcement in Budget 2005-06.

IMPORT/EXPORT POLICY: Import Policy/Export Policy description to be based on HS system 100 percent.

Copyright Business Recorder, 2005