ISLAMABAD, June 30: The Central Board of Revenue (CBR) has notified conditions for exemption of customs duty for Original Equipment Manufacturers (OEMs) of automotive sector, which would replace the deletion programme to be effective from July 1, 2006.

The conditions were notified through a customs notification SRO 656 of 2006, issued here on Friday. The notification carried a list of components (which include sub-components, components, sub-assemblies and assemblies but exclude consumables), imported in any kit form, for assembly or manufacture of vehicles from so much of customs duties, which are in excess of the rates notified under this notification. However, tyres, tubes and rim flaps shall not be entitled to exemption under this notification.The conditions for availing the facility include: i) The importer is an assembler or manufacturer who has suitable in-house facilities as defined in `annexure’ to this notification or the importer is in possession of a firm contract for the manufacture of specified goods with any other manufacturer having suitable in-house facilities and registered with the Sales Tax department for the manufacture of such goods, to manufacture road worthy vehicles according to the laid down standards and this fact has been verified by the Engineering Development Board (EDB) of the ministry of industries, production and special initiatives; ii) the importer is registered under the Sales Tax Act, 1990, with the Sales Tax department; iii) the importer-cum-assembler or manufacturer shall submit hard and soft copy of list of components with parts numbers along with respective PCT headings intended to be imported by him to the EDB as per `annex B'. The description of components and their parts numbers shall be in accordance with that given in the service manual of the vehicles.

The EDB shall verify the list of components identified as aforesaid by the importer on the lists. The Customs department will release the consignment of components for assembly or manufacture of vehicles on the basis of lists (part number and description) verified by the EDB. Pending verification of lists by the EDB, the customs department may allow provisional release against corporate guarantee submitted by the importer-cum-assembler or manufacturer; iv) the relevant customs authority shall check the declaration made by the importer-cum-assembler or manufacturer, in order to check its conformity with the lists verified in terms of conditions specified in clause iii.

In case there is any dispute or discrepancy, the importer shall be intimated forthwith and the matter shall be resolved expeditiously. If the importer so desires, pending such resolution, the consignments containing such disputed components shall be released against such corporate guarantee acceptable to the collector of Customs. The matter will be referred to the EDB for a ruling and the importer shall be entitled to make representation before the EDB; v) the importer-cum-manufacturer shall maintain records as prescribed. Such records along with reconciliation account of all inputs used in assembly or manufacture of vehicles shall be submitted to the EDB on an annual basis; vi) in case, the importer-cum-assembler or manufacturer fails to provide information as per conditions above to the EDB or for any other reason to be recorded in writing, the EDB may get an audit conducted either by themselves or through the designated persons or agency for this purpose to see if all the conditions of this notification are met.

The findings of the audit shall be communicated to the respective collector of Customs. If the EDB does not verify the list of imported components released provisionally against corporate guarantee or for any other reason to be recorded in writing, the collector may get an audit conducted by any person or agency designated for this purpose to see if all the conditions of this notification are met.

Failure to comply with the conditions of this notification will attract proceedings under relevant provisions of the Customs Act, 1969; vii) if upon audit, the import or consumption of the components is not found in conformity with the conditions of this notification or the importer-cum-manufacturer fails to comply with other conditions of this notification, the collector of Customs shall initiate proceedings for the recovery of exempted duties and taxes, besides initiating penal action under the relevant provisions of law; viii) the authorised officer of the EDB shall furnish all relevant information online to the Customs computerised system (PACCS) as per ‘Form A’ (appended to this notification) against specific under ID and password obtained under section 155 D of the Customs Act, 1969; ix) the chief executive officer of the importing company shall furnish all relevant information online to PACCS as per `Form B’ (appended to this notification) against a specific user ID and password obtained under section 155 D of the Customs Act, 1969; and x) in other collectorates or Customs stations where PACCS is not yet operational, the project director or any other authorised officer shall feed the requisite data in PACCS.