ISLAMABAD, June 15: The government has reduced duty on 564 items on their import as raw material in the federal budget 2004-05 to make the local manufacturing industry competitive both in domestic and international market.

Minister for Industries and Production Liaqat Ali Jatoi told a news conference here on Tuesday that duty on 469 items was reduced on the recommendations of his ministry.

He said that duty on 323 items was reduced from 10 per cent to 5 per cent while the duty on 88 items was reduced from 20 per cent to 10 per cent. Similarly, duty on 152 items was reduced from 25 per cent to 20 per cent.

He said the main thrust of the tariff rationalization exercise was to rectify anomalies, inadequate protection and distortions and make the local manufacturing industry competitive both in domestic and international market and make the local industry competitive against imports in the post-WTO scenario.

The duty on imported cars up to 1800 cc have been reduced from 125 per cent to 50 per cent to give the choice to the customers to import the cars. Duty on auto parts has been increased from 25 to 35 per cent to bring it on a par with the duty on CKD kits i.e 35 per cent.

This was necessitated to remove the anomaly and circumventing deletion programme, he said. To encourage the CNG buses, the duty on CKD kits of CNG has been reduced to 5 per cent.

To provide relief to the local viscose staple fibre, the duty of cotton lint has also been reduced to 5 per cent. To encourage local manufacturing of desalination plants, the duty on raw material, sub-component and components has been reduced to zero while complete plant can be imported at 5 per cent.

The condition relating to not being local manufactured has been dispensed with for availing duty concession on the import of re-located plants under the relevant notifications in order to attract relocation of complete plants to Pakistan, Mr Jatoi said.

Incentive package for agriculture sector announced by the President General Pervez Musharraf will give benefit to the sector and has been incorporated in the budget.

New entrants in tractor industry would start at 40 per cent deletion level and achieve 100 per cent in five years.

He said that the major industries to benefit from the reduction of customs duty are chemical industry, engineering industry, dyes' stuff/textile, pesticides, paints/varnishes and soaps and detergents.

Duty of raw material of Pakistan Steel like Iron ores, manganese ores and coking coal, billets, steel bars, ship breaking, dump trucks have been reduced to give benefit to the housing and construction industry.

Duty of sack craft paper for cement and sack manufacturing industry has been reduced from 20 to 10 per cent and allowed concessionary duty at 5 per cent on coal for cement industry.

He said that duty on dry cell industry has been reduced to zero from 5 per cent and raw materials of poultry feed industry has been reduced from 20 to 10 per cent.

He said that different rates of GST had been abolished and only one rate of 15 per cent would be applicable. Income tax relief has been given on import of DAP fertilizer. Withholding tax on import of agriculture tractor in CBU condition reduced and it had been withdrawn on import of plant and machinery.

However, tax withheld at import of edible oil is proposed to be treated as final tax. CED on paints and varnished at 10 per cent of retail prices and syrups, squashes and juices at 10 per cent ad.val has been withdrawn.

The minister said that the industry had been freed from the culture of inspectors and there would be no indemnity bonds, survey and installation certificates.

Responding to a question, he said 15 sub-committees for engineering industry were constituted by engineering development board and seven by experts advisory cell for other than engineering industries to finalise the proposals of tariff rationalization with the stakeholders. Replying to yet another question, he said that the benefit of these concessions should be passed on to the consumers.