GOVERNMENT OF PAKISTAN

GOVERNMENT OF PAKISTAN

CENTRAL BOARD OF REVENUE

NOTIFICATION

Islamabad, the 30th May, 1991.

CUSTOMS

S.R.O. 490(I)/91.- In exercise of the powers conferred by section 219 of the Customs Act, 1969 (IV of 1969), the Central Board of Revenue is please to make the following rules, namely:-

1. Short title and commencement:- (1) These rules may be called the Deferment of Import Duties Rules, 1991.

(2) They shall come into force at once.

2. Definitions:- In these rules, unless there is anything repugnant in the subject or context,-

(i) 'Act' means the Customs Act, 1969 (IV of 1969);

(ii) 'deferred amount' means the balance amount of import duties payment whereof has been deferred;

(iii) 'duties' includes customs duty leviable under the First Schedule to the Act;

(iv) 'duty' means import duty leviable under the Act;

(v) 'initial payment' means duties paid in cash at the time of clearance of goods; and

(vi) 'surcharge' means the additional amount payable on the deferred amount of duties.

3. Goods eligible for deferment of duty:- Any machinery or spare parts of any machinery meant for initial installation, balancing, modernizing, replacement or extension of any project shall be eligible for deferment of duties under these rules.

4. Extent of deferment:- Half of the duties payable on the goods referred to in rule 3 shall be paid in cash, and payment of the remaining half shall be deferred on the conditions, and in the manner, laid down in these rules.

5. Period of deferment:- The importer shall pay the deferred amount in a lump sum after a period of three years.

6. Surcharge:- Surcharge at the rate of fourteen per cent per annum shall be payable on the deferred amount on six-monthly basis commencing from the date of initial payment.

7. Request for deferment:- (1) Request for deferment of duties shall be made by an importer on the Bill of Entry for home consumption and submitted to the Import Section.

(2) After manifestation of the Bill of Entry for home consumption, the Import Section shall pass it on to the Appraising Section.

(3) The Assistant Collector of Customs concerned after verifying genuineness of the request, shall pass orders for allowing the concession of deferred payment.

(4) In case of any doubt, he shall refer the matter to the Collector of Customs for orders.

(5) After the request for deferment of duties has been accepted by the Assistant Collector or the Collector, the importer shall be required to furnish to the Assistant Collector concerned the documents mentioned below:-

(i) If the importer is a private limited company or a public limited company,-

(a) Bank guarantee in form 'A' on appropriately stamped non-judicial paper from a scheduled bank in Pakistan covering the deferred amount and surcharge payable thereon;

(b) An undertaking by the importer in form 'B' on appropriately stamped non-judicial paper;

(d) A copy of the Memorandum and Articles of Association of the Company; and

(e) Specimen signatures of the Directors authorized to sign the instruments, duly attested by an Officer of the Federal or Provincial Government in BPS-17 or above.

(ii) If the importer is a partnership or a sole proprietorship firm,-

(a) Bank guarantee in form 'A' on appropriately stamped non-judicial paper from a scheduled bank in Pakistan covering the deferred amount and surcharge payable thereon; and

(b) Personal collateral guarantee in form 'C' duly signed and executed, in case of partnership firm, by the managing partner and, in case of sole proprietorship firm, by the proprietor himself, to pay the deferred amount and surcharge payable thereon;

(iii) If the importer is an autonomous body of the Federal Government or Provincial Government,-

Bank guarantee in form 'A' on appropriately stamped non-judicial paper from a scheduled bank in Pakistan covering the deferred amount and surcharge payable thereon.

8. Scrutiny and acceptance of documents:- If on scrutiny the documents are found in order, the Assistant Collector shall accept the same. If he has any doubt, he shall refer the case to the Collector for orders.

9. Recovery of deferred amount:- If the importer fails to make payment of deferred amount or the surcharge payable by him, the same shall be recovered in accordance with section 202 of the Act.

10. Settlement of disputes:- All disputes pertaining to these rules shall be decided by the Collector of Customs.

11. Repeal:- The Deferment of Import Duty Rules, 1985, are hereby repealed.

FORM “A”

(On appropriately stamped non-judicial paper).

BANK GUARANTEE

The Collector of Customs,

Custom House, .......................

Dear Sir,

WHEREAS Messers ....................................... having their registered office at ........................................ (hereinafter called the importers) have imported from Messers ................................ per s.s. ................ IGM No....................... dated .................. Index No.................... dated ................... vide home consumption Bill of Entry No.......................... dated .............................. machinery/spare parts of machinery detailed in the schedule hereinto annexed (hereinafter called the machinery) ....................................... for new installation/the balancing/the modernization/the replacement/the extending of its........................ factory/project, on which, in accordance with the procedure for the deferred payment of customs-duty, laid down in the Deferment of Import Duties Rules, 1991, the importers have been allowed the concession of deferred payment of half of the amount of duties levied on the machinery;

2. AND WHEREAS an amount of Rs..................... (Rupees ...........................) has been levied as duties in respect of the said machinery of which an amount of Rs................ (Rupees ........................) is payable by the importers in cash and the balance of duties amounting to Rs.............. (Rupees ........................) (hereinafter called the deferred duties) has been allowed to be paid in lump sum after three years from the date of initial payment. Surcharge on the deferred duties at the rate of eleven per cent per annum has been allowed to be paid in half-yearly instalments, the first of such instalments being payable on the ......................... day of ......................... 19 .....;

3. AND WHEREAS the customs have agreed to release the machinery on the payment of half of the duties amounting to Rs................ (Rupees..........................) in cash alongwith furnishing by the importers of a bank guarantee covering the deferred amount and surcharge thereon as aforesaid;

4. NOW, THEREFORE, in consideration of the release of the macinery to the importers, we, Messers ..................................... Bank Limited...................... do hereby bind ourselves to the President of Pakistan to pay to the Collector of Customs the deferred amount and the surcharge thereon at the rate of eleven per cent per annum for the whole period the deferred amount or any part thereof remains un-paid from the date on which the machinery is released to the importers.

5. NOW THE CONDITIONS OF THIS BANK GUARANTEE ARE AS UNDER:-

(1) That the importers shall pay to you the deferred amount in lump sum after three years from the date of initial payment of duties.

(2) That the importers shall also pay to you the surcharge due on the deferred amount at the rate of eleven per cent per annum in six half-yearly installments, the first of such installments being payable on the ................ day................19.....

(3) That in the event of any default on the part of the importers to pay the deferred amount or of the surcharge due from them, we, Messers ....................... Bank Limited, shall pay to you any part of the deferred amount or of the surcharge due within ten days from the date of receipt of demand therefor from you which demand shall be considered by us as conclusive evidence of non-payment of the installment by the importers.

(4) That we do hereby agree to the payment of surcharge on the amount of surcharge if the installment of surcharge is delayed for more than one month from the due date till the date the payment is made, provided that you agree, on the request of the importers, not to take action under condition (6) (a) of this bank guarantee.

(5) That we do hereby agree and declare that in the event of any default in the payment of any sum stated hereunder it may, without prejudice to any other remedy which may be available to you, be recovered by you under section 202 of the Customs Act, 1969.

(6) That, notwithstanding anything contained in the foregoing, the deferred amount or any part thereof and surcharge, as aforesaid, shall immediately become payable to you in any of the following events:-

(a) if the importers make default for one month in the payment of any installment of the surcharge or of the deferred amount;

(b) if the importers cease or threaten to cease to carry on their business;

(c) if a distress or execution be levied upon or issued against any of the properties of the importers and not paid out by the importers within seven days; or

(d) if any order be made or resolution be passed for winding up the importing company otherwise than in connection with a scheme of amalgamation or reconstruction.

6. FURTHER CONDITIONS OF THIS BANK GUARANTEE ARE AS FOLLOWS:-

(1) Any notice may be given to the importers/bank by sending the same by registered post, which shall be deemed to have been served at the time when it would have been received by the addressee in the ordinary course of the post.

(2) The amount payable hereunder as principal or surcharge at the specified date may be declared and the same shall there- upon become due and payable immediately.

7. That this bank guarantee is valid upto .....................................................................

8. IN WITNESS WHEREOF we have ............................... this ............................. day of.......................... 19...... caused this guarantee to be signed under the official stamp in the presence of-

1..................................... 2........................................

Officer Manager

.................Bank Ltd .......................Bank Ltd.

Witnesses:-

1..............................................

2..............................................

Form 'B'

(On appropriately stamped non-judicial paper)

UNDERTAKING

The Collector of Customs,

Custom House ...................

WHEREAS.............................. M/s..............................................., a company incorporated under the Companies Ordinance, 1984 (XLVII of 1984), having its registered office at ........................... (hereinafter referred to as the Company) has imported, vide Bill of Entry ......................... machinery detailed in the schedule hereto annexed (hereinafter called the machinery) for new installation/the balancing/the modernizing/the replacing/the extending of its ........................... at ................................. on which an amount of Rs.................... (Rupees........................) has been levied as customs duty payable by the Company;

AND WHEREAS in accordance with the procecdure for deferred payment of duties laid down in the Deferment of Import Duties Rules, 1991, an amount of Rs................. (Rupees........................) has been paid by the Company in cash vide receipt No.................... date................ and the compnay has furnished bank guarantee of Rs........................ as security for the deferred amount of duties;

AND WHEREAS it is necessary further to furnish to you assurances connected with the performance of the obligations of the Company;

NOW, THEREFORE, we, Messers........................................... Directors of the Company, do hereby assure you on behalf of the Company that we shall conduct our business with due diligence, efficiency and in accordance with sound business practices and shall keep all its property and assets in proper order and AGREE AND UNDERTAKE as follows:-

(1) That your authorized representatives will have authority to inspect during working hours all books of account and other registers maintained by the Company.

(2) That the Company shall submit to you a certified copy of its audited balance sheet and profit and loss account within three months of the closing of the financial year together with the Auditor's report.

(3) That the Company shall pay the deferred amount of Rs..................... (Rupees.......................) in a lump sum after three years from the date of initial payment and shall also pay the surcharge due on the said deferred amount at the rate of eleven per cent per annum in half-yearly installments, the first of such installments being payable on the ................. day of...........................19..........

(4) That the company shall pay to you all money due from it promptly and fully, it being understood and agreed by us that any money having become payable by the Company and not paid shall be recoverable from the Company under the provisions of section 202 of the Customs Act, 1969, at the cost and risk of the Company, without prejudice to any other right of the Government to recover it and that no delay on your part in recovering any money due from the Company shall deprive you of your right in respect thereof or constitute any right on your part for the recovery thereof,

IN WITNESS WHEREOF we, Mr.......................... and Mr............................... in our capacity as Directors of the company have cuased this undertaking to be signed and sealed by and in the presence of our authorized representatives on this....................... day of............. 19......

1.................................................... 2.......................................................

Director of the Company Director of the Company

Witnesses:

1...................................................................................................................................................

2....................................................................................................................................................

(Name, full address and stamp of the gazetted officer/Seal of the Court).

Form 'C'

(On appropriately stamped non-judicial paper)

PERSONAL COLLATERAL GUARANTEE

The Collector of Customs,

Custom House....................

Subject:-

Dear Sir,

In consideration of your granting the concession of deferred payment of half of the import duties in accordance with the procedure laid down in the Deferment of Import Duties Rules, 1991, levied on the machinery/spare parts of machinery imported vide No.................. by our firm named........................ with their head office at.................... and allowing our said firm to pay a sum of Rs..................(Rupees_________).to you or your successor in office in the manner specified in the bank guarantee executed by ............................ Bank Limited vide No..................dated________as security for the said sum of Rs................. (Rupees.........................) and surcharge thereon at the rate of eleven per cent per annum I, Mr............................. a managing partner in the said firm/sole proprietor of the said firm, do hereby collaterally guarantee the payment of the said sum of Rs................ (Rupees ......................) together with surcharge thereon at the said rate and undertake to pay to you or to your successor in office the installments thereof regularly in accordance with the provisions of the said bank guarantee.

I do hereby specially agree that, in the event of any default in the payment of deferred amount and surcharge thereon, installments stated in the said bank guarantee, you or your successor in office may, without prejudice to any other remedy which may be available to you or to your successor in office in this behalf, recover from the guaranteeing bank, and in the event of any default on the part of that bank in making such payment, from me in accordance with the provisions of section 202 of the Customs Act, 1969.

IN WITNESS WHEREOF, I have this............... day of...................... 19....... caused this collateral guarantee and undertaking to be signed under the official stamp in the presence of Managing Partner/Sole Proprietor

Name of the firm

Witnesses:

1_____________________________________________

2_____________________________________________

MOHAMMAD ASHRAF KHAN

Second Secretary

C.No.2(8)CB/75-Pt.I.

[As amended]

S.R.O.449(I)/92, dated 14.05.1992.

S.R.O.481(I)/93. dated 14.06.1993.

S.R.O.405(I)/96, dated 13.06.1996.