GOVERNMENT
OF PAKISTAN
CENTRAL
BOARD OF REVENUE
*****
Islamabad, the
July 23, 1998.
NOTIFICATION
(CUSTOMS/CENTRAL
EXCISE/SALES TAX/INCOME TAX)
S.R.O.844(I)/98.-
In exercise of the powers conferred by section 219 of the Customs Act, 1969 (IV
of 1969), section 37 of the Central Excises Act, 1944 (I of 1944), section 50
of the Sales Tax Act, 1990, and sub-section (1) of section 165 of the Income
Tax Ordinance, 1979 (XXXI of 1979) and in supersession of its Notification No.
S.R.O.1060(I)/97, dated the 28th October, 1997, the Central Board of Revenue is
pleased to make the following rules, namely:-
1. Short title, application and commencement.- (1)
These rules shall be called the No Duty
No Drawback
Rules, 1998.
(2) These rules shall apply in respect of
an exporter, indirect exporter, small and medium enterprise exporter and export
house for the -
(i) goods imported by him under the Import Policy Order for the time being in foce, including banned and restricted items under the said Order, that may be procured without payment of customs-duty, excise duty, sales tax and income tax; and
(ii) goods or supplies purchased or procured locally without payment of excise duty and income tax.
(3) These rules shall come into force at
once.
2. Definitions.-
(1) In these rules, unless there is
anything repugnant in the subject or context-
(a) "Acts"
mean the Customs Act, 1969 (IV of 1969), the Central Excises Act, 1944 (I of
1944), the Sales Tax Act, 1990, and the Income Tax Ordinance, 1979 (XXXI of
1979);
(b) "Analysis
Certificate" means (1) certificate issued by the Collector of Customs
under rule 11 of the Manufacturing in
Bond Rules, 1997;
(2) Omitted.
(c) "exporter"
means a person who is a registered person under the Sales Tax Act, 1990, who
makes an application for issuance of a pass book to the Collector of Customs in
whose jurisdiction the registered head office is located and to whom pass book
is issued and the persons or firms engaged wholly or partly in the export of
firms engaged wholy or partly in the export of goods such as Small and Medium
Enterprises exporters and where the context permits incudes indirect exporter.
(d) "export
house" means a trading company registered as an export house under the
Registration of Export Houses Order, 1990, issued under the notification No.
SRO 843(I)/90, dated the 13th August, 1990, and also registered under the Sales
Tax Act, 1990, and to whom pass book is issued;
(e) "indemnity
bond" means a deed of indemnity executed by the export house or
exporter indirect exporter and Small Medium Enterprises as the case may be,
whereby they shall bind themselves to pay on demand the taxes leviable that may
accrue under any of the provision of the Acts.
(f) "indirect
exporters" means a person or firm who has a back to back letter of
credit Firm Contact from a direct exporter for manufacture and supply of goods
to the direct exporter;
(g) "input
goods" means all goods imported under the import policy order for the
time being in-force including banned or restricted items locally produced
goods;
(h) "manufacture" means any process incidental or ancillary to the
completion of finished goods under these rules;
(i) "pass
book" means a pass book issued by the Collector of Customs under whose
jurisdiction the head office of the export house or exporter indirect exporter
and small Medium Eport processor is located;
(j) "wastage"
means such of the residues or left over of materials or substances obtained
during the process of manufacture not capable of being used for original
purposes;
(k) Omitted.
(2) The words and expressions used and
not defined herein shall hae the meanings assigned to them in the Acts.
3. Procurement of input goods.- (1) The
export house or the exporter shall furnish to the Collector of Customs the list
of finished goods he intends to export along with the description, quantity and
value of the input goods, to be imported or purchased locally for use in the
manufacture of goods for export.
(2) The Collector of Customs shall
determine the input to output ratio showing the extent of wastage of each input
goods if such input to output ratio along with the extent of wastage have not
already been notified by the Central Board of Revenue for those particular
finished goods and shall enter in the pass book. He shall also determine the
annual requirement of the input goods based on the past export performance of
the export house.
Provided
that in case of a new exporter, the Collector of Customs may determine the
extent of the annual requirement of the input goods on the basis of input to
output co-efficient ratio or determine the requirement through survey or
analysis card without asking for the past export performance.
(3)
On an application made by an export house or exporter,
the Collector of Customs shall issue serially numbered pass book in the form
set out in Appendix I to these rules
and shall also indicate the Custom House or Collectorate for the clearance of
imported input goods as indicated by the export house or exporter.
(4)
On filing of bill of entry containing number of the pass
book, the Collector of Customs in whose jurisdiction the input goods have been
imported may allow the delivery of input goods without payment of customs duty,
central excise duty, sales tax and income tax against indemnity bond along with
post-dated cheque and enter in a master register I set out in Appendix II to
these rules:
Provided
that all entries in the Master Register and pass book shall be made by an officer
not below the rank of an Assistant Collector of Customs, in his own
handwriting, as designated by the Collector of Customs.
(5) The export house or exporter may get
his finished goods manufactured from anywhere in Pakistan including those
situated in any Export Processing Zone as defined in the Customs Export
Processing Zones Rules, 1981.
(6) If the manufactured goods are liable
to excise duty, the manufactured goods may be returned to the export house or
exporter in such manner as if these are exported under the Central Excise
Rules, 1944.
(7) The input goods produced in excisable
premises may be procured by any export house or exporter without payment of
excise duty against AR-3 prescribed under the Central Excise Rules, 1944. The
AR-3 shall stand discharged on production of bill of export in accordance with
sub-rule (5) of rule 5.
(8) Omitted.
(9)
Omitted.
(9A) Input tax Credit and refund of sales tax.- The provisions of the Sales Tax Act, 1990,
regarding tax return, input tax credit
and refund of sales tax on account of exports shall apply, mutatis mutandis; to
the locally procured and
locally purchased input goods received and purchased against a tax invoice on
payment of sales tax for use in the production of taxable supplies made by persons
to whom these rules apply.
4.
Consumption period of input
goods.- The input goods shall be consumed within six months of
the importation or local procurement, which shall be extended up to a further
period of six months on a reasonable cause shown by the exporter. If the goods are not exported within the
stipulated period, the indemnity bond along with post-dated cheque or bank
guarantee shall be enforced or encashed.
5. Export of manufactured goods.- (1) The
export house or exporter shall file a bill of export at any export station and
all the formalities of processing and examination of export goods, for the time
being in force, shall be fulfilled.
(2) The bill of export filed under
sub-rule (1) shall be endorsed "Export under No Duty No
Drawback
Rules, 1998".
(3) In case locally produced input goods,
procured under sub-rule (7) of rule 3, are used in the production of finished
goods a declaration to that effect shall be made on the bill of export.
(4) Export under these rules shall be
made against irrevocable letters of credit.
(5) After the exportation is completed,
and mate receipt stamp is duly affixed on the bill of export, it shall be
entered in the pass book by an officer not below the rank of an Assistant
Collector of Customs designated by the Collector of Customs. The said officer
shall also make respective entries in a master register II set out in Appendix
III to these rules.
(6) Export under these rules shall be
deemed to have been made as required in sub-rule (5) on the realization of
foreign exchange as shown on Bank Credit Advice issued in accordance with Annexure A to the State Bank of
Pakistan's Circular No. 64, dated the 25th August, 1993, or as per provisions
of the Customs General Order No.11 of 1998, dated the 22nd June, 1998.
(7) Exports under these rules shall be
admissible to all countries except exports by land routes to Afghanistan and
through Afghanistan to Central Asian Republics.
(8) The export under these rules shall be
made within the period fixed by the Collector of Customs concerned, or within
extended period of two years, on the recommendations of export promotion
bureau.
(9) An exporter of engineering goods, holding a valid pass book, shall be allowed to export such engineering goods, in respect of which, input output, ratios have been predetermined and specified by CBR with concurrence of Engineering Development Board. Where the goods exported are manufactured from duty and taxes paid inputs, the exporter shall inform the Collector of Customs concerned of the exporting station, at least three days prior to actual export of goods, providing him all the relevant details regarding the export order. Such exporter shall be entitled to import the aforesaid inputs, free of duty and txes in accordance with the specified input output ratios, within one year from the date of export. The provisions of above rules (3) and (4) shall not apply to the imports of the specified quantity of such inputs.
6. Value addition.- (1) The
export shall have a minimum value addition of twenty-five per cent in foreign
exchange over the cost and freight value of imported input goods irrespective
of the extent of the use of locally produced input goods.
(2) The Collector of Customs shall,
before discharging the indemnity bond along with post dated cheque or bank
guarantee, as the case may be, satisfy himself about the value addition
under sub-rules (1) and (2) and
realization of foreign exchange under sub-rules (5) and (6) of rule 5.
7. Clearance of finished goods.- (1) Any
finished goods cleared for home consumption shall be liable to statutory duties
and taxes leviable thereon on normal value or import trade price value, as the
case may be, of the inputs goods imported from abroad subject to the Import
Policy Order for the time being in force. These may include banned or
restricted items upto five per cent of the value of such import of banned or
restricted goods.
(2) The finished goods rendered
qualitatively inferior or not conforming to the export standards or factory
rejects shall be allowed disposal in the local market and the same may be
allowed to be removed by the Collector of Customs at the appraised value, and
statutory duties and taxes shall be levied as if these had been imported into
Pakistan in that form. This will however not apply to banned items to which the
provisions of sub-rule (1) shall apply.
(3)
The export house or exporter shall file a bill of entry
for home consumption for removal of such
finished goods.
8. Disposal of input goods.- (1) The
export house or exporter shall be allowed to re-export the input goods, if he
so desires, after entering it in the Pass Book within the time period specified
in rule 4.
(2) In case the export house or exporter
is unable to consume the locally produced input goods within the specified
period, it may clear the same on payment of excise duty and sales tax at the
rate applicable on the day when excise duty and sales tax is paid. This will not apply to banned items
to which the provisions of sub-rule (1) of rule 7 shall apply.
9. Destruction of goods.- (1)
Any goods that are rendered unfit for consumption or sale shall be allowed to
be destroyed by the Collector of Customs in such manner as may be specify in
writing and so entered in the pass book.
(2) Subject to sub-rule (3) no wastage of
input goods in terms of quantity, volume, weight or number, as the case may be,
shall be allowed except as determined by the Collector of Customs and entered
in the pass book and no duty and taxes shall be charged on such wastage of the
input goods. This will not apply to banned items to which the provisions of
sub-rule (1) of rule 7 shall apply.
(3) The wastage shall be destroyed either
with the permission of the Collector of Customs in the presence of an officer
not below the rank of an Assistant Collector, or central excise duty and sales
tax or both, as the case may be, leviable thereon shall be paid on such wastage
before removal.
10. Unaccounted goods.- If any export house or
exporter fails to give proper account of the goods to the satisfaction of an
appropriate officer of Customs not below the rank of an Assistant Collector,
the export house or exporter shall pay on demand an amount equal to the
statutory duties and taxes leviable on unaccounted finished goods and shall
also be liable to pay penalties imposed for such violation under the Acts and
the Imports and Exports (Control) Act, 1950 (XXXIX of 1950).
11. Remission of duties.- Subject
to satisfaction of the Collector of Customs, the duties and taxes, if any, may
be remitted in full or in part, as the case may be, in the following cases,
namely:-
(a) when any goods are damaged or
destroyed by un-avoidable circumstances or for causes beyond the control of the
export house or exporter;
(b) when the wastage of the goods is
destroyed in accordance with rule 9; and
(c) when input goods imported are
bonafide samples.
12. Transfer of ownership.- The
clearance of imported input goods for home consumption or transfer of ownership
of imported input goods shall be allowed if the new owner is also operating
under these rules.
13. Pass book. (1) The
pass book shall be printed by the Security Printing Corporation of Pakistan and
shall be issued to the export house or exporter by the Collector of Customs
concerned on payment of a fee of one thousand rupees.
(2) In case, the pass book is lost, a
duplicate pass book shall be issued on payment of five thousand rupees after
obtaining the particulars of previous imports and exports from all the Custom
Houses.
(3) A duplicate pass-book shall be
maintained at the concerned Customs House.
14. Records and Documents.- (1) The
export house or exporter shall maintain records of input goods in the form set
out in Appendix II to these rules.
(2) The export house or exporter shall
maintain records of finished goods exported in the form set out in Appendix III
to these rules.
(3) Every entry in the records shall be
initiated either by an authorized representative designated by a director of
the company or owner himself.
(4) The export house or exporter shall
preserve all the records and documents of input goods maintained under these
rules for a period of three years after the export of finished goods.
(5) The export house or exporter shall
produce records for inspection and audit on written demand by an officer of
Customs not below the rank of an Assistant Collector.
15. Penalty.- Any breach of these rules shall
be dealt in accordance with the relevant provisions of the Acts and rules made
thereunder.
(
MUHAMMAD NADIR KHAN HOTI )
CHIEF (SURVEY & REBATE)
Appendix I
[See rule 3(3)]
Pass
Book
Part-I (Input-output ratio)
(i) Description of finished goods:
(ii) Unit of production:
(iii) Description, quantity and PCT
heading of input goods used in the manufacture of one unit of finished goods:
Part-II (Import of input goods)
(i) S.No:
(ii) IGM No. and date:
(iii) Bill of Entry No. and date:
(iv) Description of input goods:
(v) Quantity:
(vi) Unit price:
(vii) C&F value:
(viii) Conversion in Pak rupees:
(ix) Port
of clearance:
Part-III ( Export of finished goods)
(i) Bill of export No. and date:
(ii) Description
and quantity of finished goods:
(iii) FOB
value of finished goods:
(iv) Conversion in Pak rupees:
(v) Port of export:
Appendix II
[See rule 3(4) & 14(1)]
Master
Register I
A. Imported Input goods.
-------------------------------------------------------------------------------------------------------------------------------------------------------
SR. BILL OF INDEX NO. VESSEL IGM NO. DESCRIPTION NO. OF
NO. ENTRY NO. AND DATE. NAME. AND DATE. OF
GOODS. PKGS.
AND DATE.
------------------------------------------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5) (6)
(7)
------------------------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------------------------------
QUANTITY. UNIT C&F
VALUE CONVERSION AMOUNT COUNTRY
PRICE. IN FOREIGN IN
PAK.RS. OF DUTY
OF IMPORT.
CURRENCY. AND OTHER
TAXES
INVOLVED.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(8)
(9) (10) (11) (12) (13)
-------------------------------------------------------------------------------------------------------------------------------------------------------
B. Locally purchased input goods/supplies.
SR. DESCRIPTION AR 3 NO AND TAX UNIT VALUE OF
NO. OF GOODS. DATE, IF ANY INVOICE PRICE. GOODS.
WITH
NAME OF NO. AND
SUPPLIER. DATE
IF
ANY,
WITH
NAME
OF
SUPPLIER.
---------------------------------------------------------------------------------------------------------------------------------------------
(1)
(2) (3) (4)
(5) (6)
---------------------------------------------------------------------------------------------------------------------------------------------
Appendix
III
[See rules 5(5) & 14(2)]
Master Register II
--------------------------------------------------------------------------------------------------------------------------------------------------
SR. BILL OF EXPORT INVOICE
NO. DESCRIPTION
QUANTITY
NO. EXPORT NO. GENERAL AND
DATE. OF GOODS.
OF GOODS
& DATE. MANIFEST NO.
AND
DATE.
---------------------------------------------------------------------------------------------------------------------------------------------------
(1)
(2) (3) (4) (5) (6)
---------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------------
VALUE OF VALUE OF TOTAL VALUE TOTAL VALUE
BILL OF
GOODS
PER GOODS PER OF GOODS IN OF GOODS LADING
UNIT IN UNIT IN PAK FOREIGN IN PAK OR
FOREIGN RUPEES CURRENCY RUPEES. AIRWAY
CURRENCY
BILL
NO.
& DATE
--------------------------------------------------------------------------------------------------------------------------------------------------------------
(7) (8) (9) (10) (11)
--------------------------------------------------------------------------------------------------------------------------------------------------------------
( MUHAMMAD NADIR KHAN HOTI )
CHIEF (SURVEY & REBATE)
[C.No.3(171)Rebate/97]
As
amended
S.R.O.920(I)/98, - dated
20.08.1998
S.R.O.548(I)/99, - dated
08.05.1999
S.R.O.886(I)/99, - dated
30.07.1999
S.R.O.381(I)/2000, - dated
17.06.2000