GOVERNMENT OF PAKISTAN
MINISTRY OF FINANCE AND ECONOMIC AFFAIRS
Islamabad,the 4th April,1998.
NOTIFICATION
(CUSTOMS)
S.R.O.236(I)/98.- In exercise of the powers conferred
by section 19 of the Customs Act,1969(IV of 1969), and clause (a) of
sub-section (2) of section 13 of the Sales Tax Act, 1990, the Federal
Government is pleased to exempt the machinery, equipment, materials,
specialized vehicles, accessories, spares, chemicals and consumables, as are
not manufactured locally, if imported for the oil pipe line projects, from the
whole of customs duty leviable under the First Schedule to the Customs Act,
1969 (IV of 1969), and sales tax, subject to the following conditions, namely:-
(1) Only
such machinery, equipment, materials, specialized vehicles, accessories,
spares, chemicals and consumables shall be entitled to exemption under this
Notification, as are certified by the relevant Regulatory Authority from time
to time in terms of Annexure VI of 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 such machinery, equipment, materials, specialized
vehicles, accessories, spares, chemicals and consumables as are approved by the
said Regulatory Authority in view of
their actual project requirements;
(2) specialized
vehicles shall be importable only on temporary basis and consumables or
chemicals shall be importable only during construction stage;
(3) any
item imported free from import duties or on concessionary rate under this
notification may be exported for replacement, repair, modification or renovation against a corporate guarantee to
be furnished to Collector of Customs
concerned and subject to the production of a certificate from the Regulatory
Authority that the item needs to be exported for replacement, repair,
modification, or renovation and may be
re-imported without payment of additional import duties;
(4) at
the time of importation, the importer shall furnish to the Collector of Customs
an indemnity bond in the form specified
below to the extent of customs-duty and sales tax exempted under this
notification. This bond shall be discharged within such period as approved by
the relevant Regulatory Authority on production of a certificate from the
Assistant Collector of Customs and Central Excise in whose jurisdiction the
project is located to the effect that the goods imported for the purposes
specified in the bill of entry have been duly installed, consumed or used or
have been scraped in the prescribed manner, continue to be held on the project
inventory of the company or have been
transferred to another pipe-line project with the approval of the
relevant Regualtory Authority provided
that the transferee project furnishes a similar indemnity bond in the manner approved by the
Collector of Customs;
(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 of a dispute whether any item is entitled to the exemption under this
notification, the item shall 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;
(6)
in
the event of an emergency in connection with some operations which seriously
endangers life or property or the operations of the project, the relevant
Regulatory Authority shall declare an emergency and the project shall be
allowed to import items considered necessary 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;
(8) the
oil pipe-line project including its contractors and sub-contractors for the
purpose of construction and erection of the project may import equipment
specialized vehicles 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 not be exported on the
conclusion of the project or transferred with the approval of the relevant
Regulatory Authority to another duty free pipe-line project then the company,
corporation and organization concerned shall be liable to pay duty and taxes
chargeable on importation; and
(9) items
imported free of import duties or at concessionary rates which becomes 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
pipe-line sector no import duties shall be levied or charged. If the item is not sold to another pipe line
sector company it shall be sold through a public tender and duties shall be
recovered at the rate of
ten per cent of the sale proceeds; and
(ii) for
vehicles there shall be a minimum retention period of five years after which
the vehicles may be disposed of in the manner provided in clause(i) except that
the full rate of import duties, net of
any import duties already paid, shall be charged subject to an adjustment of depreciation
at the rate of two per cent per month up to a maximum of twenty-four months.
Vehicles may be surrendered at any time to
the Collector of Customs without payment of any import duties and taxes under
intimation to the Central Board of Revenue.
Explanation.- For the purposes of
this notification 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.
_____________________________________________________________________________________________________
[ See condition (4) ]
( on appropriately stamped non-judicial paper )
THIS DEED OF INDEMNITY is made on the __________________ day of __________BETWEEN
Messrs._____________ 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 No.S.R.O.______, dated __________ 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 the whole of customs duty and sales tax if imported for the oil
pipe-line project.
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 release of
the goods on payment of concessionary duties under this notification, as the
case may be, the importers bind themselves to pay on demand to the Government
of Pakistan the sum of Rs. _________ being the exempted customs-duties and
taxes which otherwise would have been levied on the goods, if the importers
fail -
(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 importers on this __________________ day of
___________________19. .
( Authorised Officer)
Name and permanent address
(on behalf of importer)
Collector of Customs
(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.
[F.No..9(8)mACH./96]
( KHALIL MASOOD)
Additional Secretary
As amended
S.R.O.729(I)/99, - dated 12.06.1999