Business, Taxation

EDB seeks revision in customs duty, RD on various items in Budget 2017

The Engineering Development Board (EDB), an arm of the Ministry of Industries and Production (MoI&P) has submitted proposals for change in custom duty and regulatory duty on different items in federal budget 2017-18, well-informed sources in the FBR told Business Recorder.

According to the budget proposals which are expected to be given final touches by the FBR in a day or two, the EDB has recommended that Zhuo Li Motorcycle’s cylinder head of 70CC should be included under PCT 8714.1020 in SRO 693(1) 2006. Most of the local manufacturers of motorcycles are manufacturing cylinder head in-house, the inclusion of cylinder heads under PCT 8714.1020 in SRO 693 for 70cc motorcycle will help in indigenization as well as cater to the rest of the market. However, the EDB has proposed that custom duty on this item should remain at 15 percent but A.C.D should be fixed at 31 percent.

Dutech (Pvt) Limited (all personalized plates)- the EDB proposes that due to anomaly, the matter should be considered under table B of Part VII or Part III of Fifth Schedule of Customs Act, 1969 under PCT 7607.1990 @10 percent CD for pre-sensitise printing plates subject to condition of OR determined by IOCO. EDB has recommended reduction in duty from 20 per cent to 11 per cent.

KSB Pumps Co Ltd – (semi-finished products for Iron ore non-alloys billet, Aramco ingot) is a specialized raw material. The EDB has recommended that it should be placed under Table B of Part VII or Part III of Fifth Schedule of Customs Act, 1969 under PCT 7207.1110 @5% CD, RD 0%, semi finished products of iron or non-alloy steel billet, ARMCO ingot 60mm x 60mm x 200mm C 0.006%, Mn 0.07%, P 0.01 5%,S 0.01 5% DIN 50049/2.2 IGRADE2 Cu 0.05% N 0.005% Si TRACES subject to condition of IOR determined by lOGO. The EDB has recommended reduction of duty on this item from 20 per cent to 11 per cent.

The EDB has also recommended that duty on duplex material seam pipe/tube grade 1.4462 may be reduced to 5 per cent from 16 per cent. Schneider Electric Pakistan (Pvt) Ltd which manufactures panel parts/soft starters has argued that duty reduction on panel parts/components will flourish switch gear industry in Pakistan. Considering CPEC development and success development to this project, vital scope of foreign and local investment will result in GDP growth and job opportunities in the industry by duty reduction.

Considering the request of the company, the EDB has recommended reduction in tariff to 5 per cent from 16 per cent on the following items : drive frame. 8538.9090, contact holder. 8538.9090, pole housing. 8538.9090, contact support. 8538.9090, contact angle. 8538.9090, guide (bush). 8538.9090, housing assy. 8538.9090, shock absorber (tube). 8538.9090, roller. 8538.9090, shroud (cover). 8538.9090, partition wall CPL. 8538.9090, partition Kpl (right & left) 8538.9090, connecting rod. 8538.9090, connecting bear welded. 8538.9090, strip. 8538.9090, angle. 8538.9090, stimrad. 8538.9090, plunger head. 8538.9090, plate (plate stonner). Shanghai Industries (Pvt) Limited: welding electrodes are widely consumed and produced locally. Its input material bars and rods 14mm diameter may be include under Table B of Part VII or Part III of Fifth Schedule of Customs Act, 1969 under PCT 7213.9190 @5% CD.

Pakistan Aluminum Beverages Cans Limited – finished products attract 11 per cent customs duty whereas raw material is also importable at 11 per cent customs duty due to which the industry is disadvantaged. The EDB has recommended that this should be placed under table B of part VII of Fifth schedule of Customs Act. Tetra Pak – Aluminum Foil Plain – the company proposes that to encourage local industry in line with the concession provided to agro sector, concession should be extended to the local packaging industry. EDB has proposed reduction in duty from 20 per cent to 5 per cent in packaging material.

Falco Abrasives (Pvt) limited manufacturers of vulcanized fibre others has argued that customs duty on finished products, ie, fibre Disc (6805.3000) is available at 7.5 per cent under China FTA whereas the mentioned raw material is at 18.6 per cent under FTA. The EBD in its comments has stated that due to anomaly under China Pakistan FTA, custom duty on this product should be reduced from 20 per cent 5 per cent.

Other proposals which have been submitted to FBR by NKR Engineering (Pvt Ltd) manufactures plates for plate type heat exchanger. EDB has recommend reduction in customs duty to 5% and has also recommended that custom duty should be reduced from 20 to 5 per cent on uncoated polyester film, 16 per cent to 5 per cent on epoxy amino resin and 5 per cent from 20 per cent aluminum wire being manufactured by Britex Industries (Pvt) Limited, Lorex Industries/Al-Haj Tex Industries. The EDB has sought increase in tariff from 11 per cent to 16 per cent on pthalic anhydride. EDB is of the view that increasing CD on PA from 11 per cent to 16 per cent unbalances the tariff structure; it has been proposed that input of PA, ie, orthoxylene may be placed at 1 per cent customs duty. PAN Industries (Pvt) Ltd manufacturers of baby diapers and sanity napkins, has also sought reduction in tariff from 16 to 5 per cent. EDB has favoured the proposal and supported its placement under Table B of Part VII or Part III of Fifth Schedule of Customs Act, 1969.

The EDB has also recommended increase in RD on those local manufactured items which are covered in chapter 72, 73, 84 and 85 under SRO 568(1) 2014 aimed to protect the local industry. The EDB says that chapter 72 being primary input material for local manufacturers, RD is proposed to be reduced up to 10 % to make them competitive. Chapter 73 being secondary input material for local manufacturers RD is proposed to be reduced to the extent of 15% for better competitiveness and to provide more fiscal space in lieu of reduction of RD in chpt. 72/73 RD may be imposed from 5% to 10% on products of Chapter 84 & 85 listed in CGO. Local manufacturers will get competitive and being more value added revenue impact will also be enhanced. The EDB has also recommended 15% RD on gypsum ceiling tiles under HS Code 6809.1900 to compensate anomaly due to high rate of duty on raw materials. Officials in FBR maintain that budget proposals from EDB are poorly drafted this year as compared to previous years.

Author


Avatar