ISLAMABAD, June 6: The government has proposed to scale down customs duty to zero per cent on raw materials and machinery of export-oriented industries, reduce duty on cars, exempt 319 edible items from duties and reduce customs duty on import of life-saving drugs.
Through the finance bill 2005-6, the government has proposed to reduce customs duty on vitamins to five per cent from 10 per cent to give a boost to poultry industry.
At present, cars in CBU (completely built-up units) condition are subject to a customs duty ranging from 50 per cent to 100 per cent. Three duty slabs —for CBU cars up to 1500cc at the rate of 50 per cent, for 1501 to 1800cc at 65 per cent and 1800cc and above at 75 per cent have been proposed.
Through the bill, a new slab of 15 per cent has been introduced in addition to the existing four bands of five per cent, 10 per cent, 20 per cent and 25 per cent to provide a cushion in tariff for the growth of industry/trade. A total of 190 items (tariff lines) are proposed to be kept at 15 per cent.
It has been decided that all importers of PTA and local buyers from ICI will be given a refund equal to 15 per cent customs duty on PTA, which has been kept intact in order to honour the sovereign guarantee. All other raw materials for local manufactures of fibre would be zero-rated.
Customs duty on chips would be reduced to three per cent, 6.5 per cent on fibres, seven per cent on yarn except viscose, which is at five per cent due to bound rates and 14 per cent on fabrics of all man-made yarns and blended yarns. This will also apply to woollen and silk fabrics and their raw materials. In addition, a one per cent uniform income tax will be charged on all these items.
Primary raw materials like lace, natural gums, resins, gum resins and oleo resins are inputs which are mostly used in industries like textiles and pharmaceuticals. Duty rationalization is proposed on these items to support the related sectors.
A reduction in duty rate is proposed on 416 items used by chemicals and allied industry on a wider scale. The reduction goes down from 25 per cent to 20 per cent, 20 per cent to 15 per cent and 10 per cent to five per cent.
Exemption of customs duty has been proposed on wood (HS heading 44.03 & 44.07) and reduction in customs duty on wood products from 25 per cent to 20 per cent and 10 per cent to five per cent has been proposed.
A reduction is proposed in duty on medicines like vaccines for hepatitis-B from 20 per cent to 10 per cent and 10 per cent to five per cent, while duty on cosmetic inputs is proposed to be rationalized. The reduction of duty ranges from 20 per cent to 15 per cent and 10 per cent.
In order to make soap and detergent industry competitive and viable, customs duty on its inputs is proposed to be reduced, from 25 per cent to 20 per cent, 20 per cent to 15 per cent and 10 per cent to five per cent. It is proposed that import of raw materials of washing machine may be allowed at the rate of five per cent, components and sub-components may be allowed at 10 per cent. Import of picture-tubes for TV sets imported by manufacturers may be allowed at zero-rate as opposed to five per cent customs duty; all these sub-components and components used in circuit-breakers may be allowed at a concessionary rate of five per cent duty; customs duty on parts and components of energy-saving lamps has been reduced to five per cent; four raw materials and two components used for manufacture of composite doors and windows may be allowed at a concessionary rate of five per cent and 15 per cent, respectively as against the existing rate of 10 per cent to 25 per cent.
Through the finance bill, it has been proposed that CKD kits for assembly of computer monitors imported by the manufacturers/assemblers may be exempted from five per cent customs duty; import of compressors (HS heading 8414.3010) and evaporators (HS heading 8418.9910) may be zero-rated and a reduction in the duty on petroleum additives (HS 3811.2100.3811.2900 & 3811.9000) from 20 per cent to 10 per cent to five per cent has been proposed.
It is proposed that in case 50kg silver or more is imported the rate of import duty will be Rs120/kg and in case five kg or more gold is imported the rate of duty will be Rs2,500/kg.
This measure will help produce more gold and silver products for export.
It is proposed that duty on locally-made machinery be reduced to 10 per cent and duty on parts be equated with duty on machinery to which they form part. The existing concession to CNG sector is also proposed to be continued to encourage its development.
It is proposed to exempt machinery, equipment and parts etc used by the civil aviation industry, all items/equipments irrespective of the fact whether manufactured locally or not and are required for four and five stars hotel projects may be allowed at five per cent duty and zero per cent sales tax as certified by the ministry of tourism at the time of initial conceivement of the project.
Customs duty may be reduced on tyres for light trucks (HS heading 4011.2010) from 25 per cent to 20 per cent and for construction/industrial vehicles (HS headings 4011.6200, 6300, 6900, 9300, 9400 & 9900) from 25 per cent to 10 per cent.
The rate of duty on parts is proposed to be reduced to 25 per cent so that there is a reduction in the price of bicycle which is being manufactured locally. The duty on carriages for disabled persons may be reduced from 10 per cent to five per cent, while reduction in duty on baby carriages (HS heading 8715.0000) from 30 per cent to 20 per cent has been proposed. Import of CKD kits of diesel buses by local assemblers/manufacturers at five per cent is proposed. The CBU rate of 20 per cent will be maintained.
Exemption in the duty on import of CKD kits by local assemblers/ manufacturers has been proposed; all 20 components used in CNG dispensers may be allowed at a zero duty rate; Duty on import of worn clothing may be enhanced from five per cent to 10 per cent ad val.
Creation of new PCT headings to ensure protective treatment to locally-produced items has been proposed, duty rationalization on raw material used in pharmaceuticals and duty raise on 16 items manufactured locally are also proposed. Duty-free import of printed price lists, brochures and catalogues has been proposed, besides exemption of five per cent customs duty on import of pre-recorded digital Holy Quran.
