GOVERNMENT OF
PAKISTAN
MINISTRY OF
FINANCE, REVENUE AND ECONOMIC AFFAIRS
(REVENUE
DIVISION)
NOTIFICATION
Islamabad ,the
9th May,1994.
CUSTOMS
S.R.O.367(I)/94.-
In exercise of the powers conferred by section 19 of the Customs Act,1969 (IV
of 1969), the Federal Government is pleased to exempt the machinery, equipment,
materials, specialized vehicles, accessories, spares, chemical and consumables,
as are not manufactured locally, if imported for the projects mentioned in
column (2) of the table below for the phases and by the importers mentioned in
columns (3) and (4) respectively of
that table, the Exploration and Production (E&P) Companies specified in
column (4), against serial No. 1, in column (1), of the table below, from the
whole of customs-duties and others from so much of the custom-duty as is in
excess of 10% leviable under the First Schedule to the Customs Act, 1969 (IV of
1969), subject to the following conditions, namely :--
(1) Only such machinery, equipment, materials, specialized vehicles, accessories, spares, chemicals and consumable shall be entitled to the exemption under this notification, as are certified by the relevant Regulatory Authority from time to time in terms of Annexure VI to the Petroleum Policy,1994. The relevant Regulatory Authority shall take such measures as it deems necessary to ensure that the concerned companies, corporations and organizations entitled to avail exemption under this notification import only machinery, equipment, materials, specialized vehicles, accessories, spares, chemicals and consumables as is approved by the said Regulatory Authority in view of their actual project requirements;
(2) exemption available to E & P
companies sector, S.No.1 of the table, shall be admissible only to such E &
P companies who hold permits, licences, leases and who enter into supplemental
agreements with Government of Pakistan
in terms of the said Petroleum Policy or those who sign new petroleum
concession agreements on or after 1st January,1994. Exemption under rest of the
S.Nos. of the table shall be available to E & P companies without any such
conditions;
(3) in respect of goods imported under
S.No.1(i) of the table, after the first Commercial Discovery has been made in
the concession area, the respective
Operator shall pay to the Collector of Customs on an annual deferred basis a
consolidated fee equal to 3% of the
total invoice value of the equipment, materials, specialized vehicles ,
accessories, spares, chemicals and consumables
imported by it, its contractors and sub-contractors
after the first Commercial Discovery of all activities in the area including
but not limited to exploration activities in that particular concession area
during the year. Goods imported under
S.No.2 to S.No.8 of the said table shall not be subjected to such
consolidated fee. Items imported free
of import duties under S.No.1(ii) of the table
if sold to E & P companies as part of their services will be
included in the total invoice value for calculation of the fee payable by the Operator. The value to be taken for
the service company items for inclusion in the total invoice value shall be
their invoice value at the time of
import. The Operator shall submit an account of all import invoices to the
Regualtory Authority and the Collector of Customs for confirmation with their
record at the time of annual payment.
This provision will also apply to OGDC
and other local E & P companies who hold mining, development and production
leases and have not been required to
enter into any agreement with the
Government of Pakistan;
(4) The Petroleum sector companies or
importers shall furnish to the Collector of Customs an Indemnity Bond in the
form set out in the Annexure below to th extent of customs-duties exempted
under this Notification on the import of items of the value specified in the
import authorization issued by the Ministry of Commerce. The Indemnity Bond shall be valid for a
period of five years for the amount of customs-duties payable and exempted on
import of item covered under the above referred import authorization. The
Bond shall be discharged on production of a certificate set out in the Annex-I
duly countersigned by the Regulatory Authority
or its authorized representative to the effect that items imported under
the specified import authorization have been duly installed or consumed or used
or have been scrapped in the prescribed manner. The Bond shall be extended for a further period of one year if
the relevant Regulatory Authority recommends such extension for any reason or
shall direct for substitution of such Bond for outstanding amount of
customs-duty on any item transferred to another Petroleum sector company
entitled to import of such items under this Notification; Provided that the
transferred company furnishes a similar Indemnity Bond in the form set out in
the Annexure below;
(5) in the event of non-production of
such certificate as aforesaid by the importer, the Collector of Customs shall
enforce the indemnity bond and proceed to recover Government dues under section
202 of the Customs Act, 1969 (IV of 1969), and the rules made thereunder;
(6) in the event a dispute arises whether any item is entitled to the exemption under this notification, the item will be immediately released by the Customs Department against a corporate guarantee. A subsequent certificate from the relevant Regulatory Authority that the item is covered under this notification shall be given due consideration by the Customs Department towards finally resolving the dispute;
(7) in
the event that an emergency condition occurs in connection with operations by a
petroleum sector company which seriously endangers life or property or the
operations of the project, the relevant Regulatory Authority shall declare an
emergency and the operating company shall be allowed to import any item
or items considered necessary by the said company to deal with the emergency
under intimation to the Regulatory Authority without fulfilling such
formalities as are likely to cause delay and such formalities will be attended to thereafter as soon as
practicable; and
(8) items imported free of import duties
or at concessionary rates which become scrap, junk or obsolete shall be
disposed of in the following manner,
namely:-
(i) in the event an item other than vehicles, is sold to another company in the petroleum sector no import duties shall be levied or charged. If the item is not sold to another petroleum sector company it shall be sold through a public tender and duties shall be recovered at the rate of 10% ad val. of the sale proceeds;
(ii) for vehicles there would be a minimum retention period of five years after which the vehicles may be disposed of in the manner provided in (i) above except that the full rate of import duties, net of any import duties already paid, shall be charged subject to an adjustment of depreciation @ 2% per month up to a maximum of twenty-four months. Vehicles can be surrendered at any time to the Government of Pakistan without payment of any import duties under intimation to the Central Board of Revenue; and
(iii) any item imported free from import duties or on concessionary rate under this notification may be exported for replacement, repair, modification or renovation and may be re-imported without the payment of additional import duties subject to the production of certificate from the Regulatory Authority that the item needs to be exported for replacement, repair, modification, or renovation and a corporate guarantee for re-import by the exporting company.
Explanation.- In this notification,-
(i) "exploration and production(E & P) companies" includes the Oil and Gas Development Corporation;
(ii) "invoice value" means value as ascertained by the Collector of Customs; and
(iii) "Regulatory Authority" means the relevant Regulatory Authority specified in Annexure VI to the Petroleum Policy, 1994.
(iv) Exploration and Production Companies and Service Companies can import single or double cabin pickups and vehicles with mounted equipment and other specialized field vehicles without any restriction, keeping in view their work requirement and on the recommendations of a committee headed by Joint Secretary (Admn), Ministry of Petroleum and Natural Resources with a representative each of the concerned Regulatory Authority, PEPPCA and Service Companies as its members.
(v) The expression "not manufactured locally" shall mean the goods which are not included in the list of locally manufactured goods, specified in the General Order, issued by the Central Board of Revenue.
(1) (2) (3) (4)
1. Petroleum
projects covered Exploration, development, (i)
Exploration and production
under
petroleum concessions production,
compression E&P)companies,
their
agreements,
permits,licences and enhanced recovery.
contractors and
and
leases. sub-contractors.
(ii)
Companies providing services
covering
seimsic, drilling,
cementation,
testing or
similar
type of services to
E
& P companies.
2. (a)
Refinery projects. Replacement. Existing refineries.
(b)
Refinery projects. Establishment(initial E
& P companies where they
installation),
expansion, establish a refinery as a part of
modernization,
and their field development.
upgradation.
(c) Refinery projects. Establishment(initial Refining
companies, corporations,
installation),
expansion, organizations.
modernization
and upgradation.
(1) (2) (3) (4)
3. Oil
and Gas pipelines Oil
transportation and gas (i) E&P companies where they
projects. transmission and
distribution establish
a pipeline.
(as
determined by the relevant]
Regulatory
Authority). (ii) Petroleum
refining companies.
(iii) Petroleum refining companies.
(iv) Gas transmission, distribution
companies,
corporations and
organizations.
4. Liquefied petroleum Establishment(initial E & P companies,
gas
projects. installation),
and expansion corporations
and organizations,
of
LPG processing and where they establish LPG
extraction
plants, LPG facilities.
bottling
and handling facilities.
including
floating storge vessels
whether
self-propolled or otherwise.
5. Compressed
natural Establishment of natural
gas (i) E&P comapnies where
gas
projects. compression,
re-filling and they
establish CNG facilities
outlet
facilities, the conversion and/or
market CNG.
of
vehicles to CNG and
transportation
of CNG through (ii) CNG companies.
specialized
vehicle mounted
systems. (iii)
Petroleum marketing companies,
corporations
and organizations.
6. Petroleum
terminal Establishment of port
terminals (i) E&P
companies where they
projects. mainly used to handle
petroleum establish petroleum
terminal
items
including crude and fuel oil, facilities.
petroleum
products, LPG and CNG
whether
for import or export. (ii) Terminal companies,
corporations
and organisations.
7. Energy
conservation, Energy conservation,
efficiency E&P companies and
other corporation/
environment
and safety enhancement, pollution, organizations, where they
import
control
projects. environmental and
safety control. conservation, efficiency
enhancement,
pollution
control, environmental and
safety
equipment.
8. Construction
and During
all phases listed All
petroleum sector companies,
erection
of petroleum at
S.No.1 to S.No.7 above. corporations
and organizations
projects
listed at S.No.1 including
their contractors and
to
S.No. 7 above. sub-contractors
for the purpose
of
construction and erection of
petroleum
projects on an import-cum
export
basis against a corporate
guarantee
equal to the value of
import
duties and taxes that would
have
otherwise been payable on
import.
Should the goods, etc.,
not be exported on the
conclusion
of
the project or transferred with
the
approval of the relevant
Regulatory
Authority to another
duty
free petroleum project then
the
company, corporation and
organization
concerned will be
liable
to pay duty and taxes chargeable
on
importation.
ANNEXURE
[See
condition (4) ]
(On
appropriately stamped non-judicial papaer)
THIS
DEED OF INDEMNITY is made on the _________________day of ______________BETWEEN
Messers_____________having registered office at ______________(hereinafter
called "the importer" which means and includes their successors,
administrators, executors and assignees), of the one part, AND the President of
Pakistan through the Collector of Customs(hereinafter called "the
Collector of Customs"), of the other part;
WHEREAS
the Government of Pakistan has, by its decision contained in Notification S.R.O.367(I)/94 dated the 9th
May,1994 and subject to the conditions given in the said Notification, been
pleased to direct that machinery, equipment, materials, specialized vehicles,
accessories, spares, chemicals and consumables as are not manufactured locally
shall be exempt from so much of the customs-duty as is in excess of 10% if imported for the projects specified in
the table of the said Notification.
AND
WHEREAS M/s __________________________having registered office at
__________________have imported the goods mentioned in the Schedule (please
specify in the Schedule the description and quantity of goods imported) to this
Bond for the purpose of (please specify the particulars of the project and
phase of the project).
NOW,
THEREFORE, in consideration of the relase of the goods on payment of
customs-duties as is in excess of 10%, the importers bind themselves to pay on
demand to the Government of Pakistan the sum of Rs.________________being the
customs duty leviable on the goods, if
the importers fail to produce a certificate of vertification form the
Regulaotory Authority within such period as it may approve in accordance with
condition (4) of this Notification.-
(i) to produce a certificate of
verification from the concerned Assistant Collector of Customs and Central
Excise, within the period as approved by the relevant Regulatory Authority as
required under the said Notification; and
(ii) to produce such other evidence as the
Collector of Customs may require to satisfy himself that the goods have been
installed, used, consumed, scrapped, retained in the project inventory or
transferred, as the case may be, in accordance with the conditions of the said
Notification.
The
importers further agree and bind themselves that the amount covered by this
Bond may be recovered as arrears of customs-duties under section 202 of the
Customs Act, 1969 (IV of 1969) and the rules made thereunder.
This
Bond shall be rendered void when the aforesaid certificate has been produced
and the Collector of Customs is satisfied that the importers have fulfilled all
the conditions of this Bond and the aforesaid Notification.
Signed
by the importers on this____________________________day of
_______________________19 .
(
Authorised Officer )
Name and permanent address
( on behalf of the President )
Witness___________________________________________
(signature, name,
designation and full address).
Witness___________________________________________
(signature, name,
designation and full address).
Note.- The amount of indemnity bond
may be reduced by the Collector of Customs, if any company, corporation or
organization produces a certificate from the concerned Assistant Collector of
Customs and Central Excise to the effect that part of the goods covered under
the indemnity bond has been installed, used or consumed, as the case may be, in
terms of the said Notification during the validity period of the indemnity
bond.
ANNEXURE-I
I, Mr._____________M/s ___________________________________certify that all the items or the items indicated in the enclosed list imported vide Index No.________of an IGM No._________dated__________under Indemnity Bond No._______dated_______have been duly installed or consumed or wed, or have been scrapped in the prescribed manner or transferred to M/s ___________dated ________(copy enclosed) issued by the Ministry of Commerce and indemnity bond furnished by that company is enclosed. It is, therefore, requested that the indemnity bond No.________dated________for the amount of Rs._______may be allowed release or a certificate may be issued for the release of the Indemnity Bond, if misplaced.
Name____________________
Designation_______________
Countersigned
by Regulatory Authority
Name___________________________
Designation
______________________
Officer's
Seal ____________________
___________________________
_____________________________________________________________________________________________________
[F.No.1(7)-Mach/94-49/94]
(
RIAZ HUSAIN NAQVI )
Additional
Secretary
[As amended]
S.R.O.573(I)/94, - dated 09.06.1994
S.R.O.1091(I)/94. - dated 08.11.1994
S.R.O.73(I)/96, - dated 22.01.1996
S.R.O.382(I)/96, - dated 13.06.1996.
S.R.O.749(I)/98, - dated 29.06.1998
S.R.O.692(I)/99, - dated 12.06.1999
S.R.O.1082(I)/99, - dated 25.09.1999