Business Recorder Pakistan,. September 27 2007
Duty on CNG regulator import exempted
SOHAIL SARFRAZ
ISLAMABAD (September 27 2007): The Federal Board of Revenue (FBR) has exempted customs duty on the import of compressed natural gas (CNG) regulators, their components and raw materials required for diaphram/regulator diaphragms, in CKD kit used in the manufacture of CNG kits.
The board has amended SRO.565(I)/2006 through an SRO.981(I)/2007 issued on Wednesday bringing changes in tariff on the recommendation of the Anomaly Committee headed by PM's Adviser on finance Dr Salman Shah.
Sources said the Landirenzo Pakistan, Karachi/Tesla Industries, Islamabad requested that the description of input ie "raw materials for regulator diaphram" specified in SRO 565 may be changed to "regulator diaphrams/raw materials for regulator diaphram".
However, the board was of the view that it is not a case of budget anomaly, but enhancing the scope of concessionary rate of zero percent to the inputs for manufacture of CNG kits under SRO 565. The Engineering Development Board (EDB) had proposed replacing the existing entry ie "raw materials for Regulator Diaphram" with "Regulator Diaphrams/Raw materials for Regulator Diaphram" under SRO 565. The proposed change in description as proposed by the EDB is supported, the board added. The anomaly committee had recommended to change the description as suggested by the FBR.
Through another amendment to SRO.565(I)/2006, the exemption of customs duty would only be available on the import of compressors with non-CFC and HCFC gases used in the manufacture of air conditioners. According to the notification, sub-components and components used in the manufacture of air-conditioners would be liable to zero-percent duty. The compressor for use with non-CFC and HCFC gases would be liable to zero-percent duty.
The exemption would be available in excess of 15 percent duty on the import of evaporators enamelled and coated for antirust (PCT heading 8415.9011) and condensers (PCT heading 8415.9021) used in the manufacture of car air-conditioners.
The zero-percent customs duty would be applicable on the import of printing hardener/emulsion/oil and mixture of chemical (defoculant) for ceramic body (PCT heading 3824.9099) used in the manufacture of ceramics.
Sources said the limited description of raw material namely "printed emulsion" under SRO.565 has created confusion at the time of customs clearance. The units requested for inclusion of specific description ie "Printing Hardner/Emulsion/Oil and Mixture of chemical (Defoculant for Ceramic Body" in concessionary SRO 565.
The board was of the view that it is not the case of budget anomaly. The raw material printed emulsion HS Code 3824.9099 is presently exempted from duty for manufacture of ceramics under SRO 565. printing hardner and printing emulsion both are provided in SRO. 565(I)/2006.
The anomaly committee had recommended for inclusion of specific description ie "Printing Hardner/Emulsion/Oil and Mixture of chemical (Defoculant for Ceramic Body" in SRO.565. According to another concession, the board would exempt customs duty in excess of 5 percent on the import of flux cored solder wire used in the production of electrical capacitors.
Sources said the EDB has forwarded the request of the Amber Capacitors, Lahore, for inclusion of Flux Cored Solder Wire-HS Code 8311.3000 in SRO 565 for manufacture of electric capacitors. However, the board responded that it is not a case of budget anomaly rather a request for inclusion of a new raw material in SRO.565. The Flux Cord Solder Wire is manufactured locally, therefore, recommendation of EDB regarding its inclusion under Sr. No 41 of SRO565(I)/2006 is not supported by the board.
The anomaly committee had recommended to add Flux Cored solder Wire (8311.3000) under Sr. No 41 of SRO.565(I)/2006 as proposed by the EDB. Exemption of customs duty in excess of 5 percent would be available on the import of gum rosin and maleic anhydride used in the manufacture of fortified rosin.
Sources said that the Descon Chemicals had approached the board with the plea that they are manufacturers of fortified rosin on which duty has been reduced from 15 to 10 percent. The decrease in duty will encourage import of this product and the industry will become uncompetitive. The unit had requested to increase the duty to 20 percent.
The FBR stated that it is not a case of budget anomaly rather a case of tariff protection. Duty on fortified rosin was reduced on the recommendation of MOIP/EDB, but subsequently they again recommended to increase in duty on this item on the plea that reduction in duty has reduced the tariff protection which now comes to 1.14 percent which is very low. The recommendations of EDB are supported by CBR and 5 percent regulatory duty (RD) may be imposed on this item to restore the pre-budget rate of 15 percent, the board opined.
The anomaly committee had recommended that the duty on raw materials ie gum rosin (3806.1010) and Maleic Anhydride (2917.1400) for the manufacture of fortified rosin be reduced to 5 percent through industry specific SRO, sources added.
The raw materials ie raw chipboard/particle board used in the manufacture of laminated board would be subjected to exemption in excess of 10 percent duty. The offset paper used in the manufacture of carbonless paper would be exempted from duty in excess of 15 percent ad valorem.
Sources said the Thal Ltd has requested the board that the rate of duty on laminated chipboard is 20 percent and the rate of duty on raw chipboard which is the raw material of laminated chipboard is also 20 percent. The company has requested to bring the duty on raw chipboard to 5 percent in order to compete with the imported chipboard. The board responded that it is not a case of budget anomaly.
The rate of duty on chipboard was reduced from 20 to 15 percent on the recommendation of the EDB. There are a number of units manufacturing laminated board, therefore, as recommended by the EDB, the pre-budget rate may be restored by levying 5 percent RD. The anomaly committee had recommended to reduce duty on raw chipboard/particle board (4410.1100) to 10 percent through SRO.565/2006 for the manufacture of laminated board, sources added.