13 June 2004	Sunday	24 Rabi-us-Saani 1425

ISLAMABAD, June 12: The government has scaled down duties on all types of machinery to 5 per cent, reduced rates of customs duty on import of motor vehicles, exempted agriculture machinery from customs duty, reduced duty on raw materials , brought down duty on 10 smuggled prone items and levied 5 per cent customs duty on import of IT related products.

Through the Finance Bill 2004-05, the government has reduced the customs duty on all types of plants, machinery and equipment, not locally manufactured, to 5 per cent. It was also announced that in addition, there will be no sales tax of 15 per cent and withholding tax of 6 per cent on the duty paid value.

It was also decided to allow zero rated sales tax supply of plant, machinery and equipment. The government has also done away with the conditions like surveys, installation certificates and indemnity bonds.

According to the Finance Bill, the minimum duty will be 50 per cent on cars up to 1300CC; 70 per cent on cars up to 1600 CC; 80 per cent on cars upto 1800 CC and 100 per cent on cars above 1800 CC. The government has also proposed that raw materials, sub-components and intermediaries, sub-assemblies and assemblies and components would be subjected to 5 per cent, 10 per cent, 20 per cent and 35 per cent customs duty, respectively.

For agriculture sector, the government has also allowed a relief of Rs100 per bag in the price of phosphatic fertilizers. All imported machinery not manufactured locally has been exempted from customs duty, sales tax and withholding tax. Duty exemption was also allowed on raw materials for local manufacturers, formulation of agriculture pesticides. The government has further reduced duty from 30 per cent to 10 per cent on import of agricultural tractors if not manufactured locally.

Duty on the import of specified construction machinery not manufactured locally was reduced to 5 per cent. The government has reduced customs duty on raw materials by 20 per cent or 10 per cent or 5 per cent. The CBR has identified 469 such raw materials on which the duties were reduced.

The government has reduced the customs duty on 10 smuggled-prone items- tea, bus and truck tyres, video and digital cameras, betal nuts, silk yarn, cosmetics, microfilms and spices. On tea the duty is reduced to 10 per cent while on other items duty was reduced to 5 per cent.

The government exempted customs duty on imports of aircraft and engines for commercial use, provide duty concession on CNG kits of buses, reduced customs duty, which ranged between 10 per centand 25 per cent on various equipments to 5 per cent, reduced customs duty to 5 per cent on import of plant and machinery and equipment for hospitals and educational institutions and the warehousing surcharge was reduced to 1 per cent from 2 per cent.