Economic Coordination Committee (ECC) of the Cabinet on Friday revised regulatory duty (RD) on dozens of imported items, of which RD is imposed on 11 items ( 58 tariff lines), scrapped on 8 items (59 tariff lines), increased on 5 items (43 tariff lines) and reduced on 6 items (22 tariff lines) on the proposal of different sectors.
Giving the background, the sources said that in order to improve balance of payment position by reversing the trend of widening trade deficit, the ECC in its meeting held on October 6, 2017 approved the proposal for increase/levy of RD ranging from 10% to 30% on a number of non-essential/ luxury/ locally produced items. Consequently, the FBR issued SRO 1035(1)/2017 on October 16, 2017 in terms of section 18(3) of the Customs Act, 1969, resulting in the levy of RD on 27 new items (137 tariff lines) and increase in RD on 31 existing items (219 tariff lines).
The sources said a large number of representations were received against levy/increase of the RD from different stakeholders. Simultaneously local manufacturers of various items also approached the FBR with proposals for levy/increase of RD on certain locally produced goods to encourage import substitution. Some trade associations also approached Standing Committees on Finance of both the National Assembly and the Senate. The latter, after conducting several hearings recommended forming a committee and considering all the representations regarding RD filed by different stakeholders during meeting held on November 16, 2017.
Resultantly an Inter-Ministerial Committee, comprising representatives from FBR, Ministry of Commerce and Ministry of Finance was constituted which held several meetings and also consulted the Textile Division, Engineering Development Board and National Tariff Commission.
According to sources, a total of 53 representations were received from different stakeholders. In 41 representations, the importers and local manufacturers sought removal /reduction or partial exemption from RD claiming that the same are input goods for their industry.
In 12 representations, the local manufacturers sought protection against cheaper imported goods through the imposition/ enhancement of RD. Certain anomalies in the existing duty structure were also identified in some representations with a request for rationalization. The Committee examined all the representations regarding removal, rationalization and imposition of RD and made recommendations.
Keeping in view the recommendations made by the committee and to rectify tariff anomalies, the FBR proposed that RD on 8 items (59 tariff lines) should be done away with as per conditions whereas RD on 6 items (22 tariff lines) should be reduced as per conditions, RD should be increased on 05 items (43 tariff lines) and RD on 11 items (58 tariff lines) should be levied afresh.
The FBR is of the view that the impact of these measures during the remaining 06 months (January to June) is expected to be revenue neutral. The ECC was informed that in terms of section 18(3) of the Customs Act 1969, the Board with approval of federal minister-in-charge is empowered to levy RD. However, this power has been challenged by various petitioners in the High Courts of Sindh and Punjab. Accordingly, as a matter of abundant caution, the ECC was requested to grant approval in principle to revise RD on different items. The items on which RD has been revised, increased, imposed and reduced are as follows:
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Annex-1
ITEMS ON WHICH RD IS PROPOSED TO BE REMOVED
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S. No. PCT code Items Existing Proposed
RD (%) RD (%)
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1 1202.4200 Shelled, whether or 30 Exemption to the
not broken extent of imports by
registered
manufacturers of food
& confectionary
industry
2 1517.9000 Other 30 Exemption of RD to
the extent of imports
by registered
manufacturers of food
& confectionary
industry
3 1901.9020 Preparations other 20 Exemption to the
than in retail extent of , imports
packing, not by units certified to
containing cocoa be vertically
integrated poultry
processing Units |
engaged in production
of value added
chicken products
4 1901.9090 Other 20 -do-
5 1905.9000 Other 20 -do-
6 2103.900C Other 50 -do-
7 3923.4000 Spools, cops, bobbins 10 0
and similar supports
8 3926.9099 Other 10 Exemption to the
extent of
Sliver cans
Lollipop sticks and
Parts imported by
vendors of automotive
OEM sector
9 4016.9990 Other 10 Exemption to the
extent of
Rubber apron cots and
Parts imported by
vendors of automotive
OEM sector.
10 87.03 Motor cars and other 15, 30% Exemption of RD to
motor vehicles 80 the extent of
principally designed vehicles (CBU)
for the transport of imported by new
persons (other than entrants as
those of heading enumerated in Auto
87.02), including Development Policy
station wagons and vide Sr.1, Table-III
racing cars. of SRO 656 (l)/2006.
11 8415.9012 For vehicles of 20 Exemption to the
chapter 87 extent of import by
vendors of automotive
OEM sector
12 8415.9021 For vehicles of 20 -do-
chapter 87
13 8415.9091 For use with air 20 -do-
conditioning machines
of PCT headings
8415.2010, 8415.2020,
8415.2030 and
8415.2090
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Annex-II
ITEMS ON WHICH RD IS PROPOSED TO BE REDUCED
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S. No. PCT code Items Existing Proposed
RD (%) RD (%)
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1 1805.0000 Cocoa powder, not 40 20
containing added sugar or
other sweetening matter.
2 3402.1110 Sulphoric acid (Soft) 20 10
3 3402.1190 Other 20 10
4 3402.1220 Other than in retail 20 10
packing
5 3402.1290 Other 20 10
6 3402.1300 Non-ionic 20 10
7 3402.1910 Cocoamidopropyl betaine 20 10
(CAPB)
8 3402.1990 Other 20 10
9 3402.2000 Preparations put up for 35 25
retail sale
10 3402.9000 Other 35 25
11 3923.2100 Of polymers of ethylene 10 5
(If imported by
registered
units for in
house use for
packaging food
and dairy
products)
12 64.06 Parts of footwear 25 15
(including uppers whether
or not attached to soles
other than outer soles)
removable in soles, heel
cushions and similar
articles gaiters,
leggings and similar
articles, and parts
thereof.
13 8415.9011 Enamelled and coated for 20 10
antirust purposes (if imported by
registered
units of Air
Conditioner
manufacturers)
14 8415.9019 Other 20 -do-
15 8415.9029 Other 20 -do-
16 8415.9030 Covers for inner body. 20 -do-
17 8415.9099 Other 20 -do-
18 9405.1090 Other 50 30
(on import of
Light fittings
with fixed/
fitted LED/SMD
lights)
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Annex-III
ITEMS ON WHICH RD IS PROPOSED TO BE INCREASED
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S. No. PCT code Items Existing Proposed
RD (%) RD (%)
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1 16.02 Other prepared or 10 & 15 20
preserved meat, meat
offal or blood.
2 3904.1090 PVC Resin 2 4
3 54.07 Woven fabrics of 5 8
synthetic filament yam,
including woven fabrics
obtained from materials
of heading 54.04
4 54.08 Woven fabrics of 5 8
artificial filament yarn,
including woven fabrics
obtained from materials
of heading 54.05
5 6307.9030 Caps (knitted) 5 10
6 70.05 Float glass and surface 5 10
ground or polished glass,
in sheets, whether or not
having an absorbent,
reflecting or non-
reflecting layer, but not
otherwise worked except
wired glass (7005.3000)
17 8544.4920 Multi core, flexible, 0 5
flat type copper.
Insulated (all features
together)
18 8544.4990 Other 0 5
19 8544.6000 Other electric 0 5
conductors, for a voltage
exceeding 1.000 V
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Annex-IV
ITEMS ON WHICH RD IS PROPOSED To BE LEVIED
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S. No. PCT code Items Existing Proposed
RD (%) RD (%)
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1 0408.9000 Other 0 5
2 55.09 Yarn (other than sewing thread} 0 3
of synthetic staple fibers, not
put up for retail sale.
3 55.10 Yarn (other than sewing thread) 0 3
of artificial staple fibers, not
put up for retail sale.
4 55.11 Yarn (other than sewing thread) 0 3
of man-made staple fibers, put
up for retail sale.
5 5505.0000 Hats and other headgear, knitted 0 5
or crocheted, or made up from
lace, felt or other textile
fabric, in the piece (but not In
strips), whether or not lined or
trimmed: hair-nets of any
material, whether or not lined or
trimmed.
6 7007.1900 Other 0 5
7 7008.0000 Multiple-willed insulating units 0 5
of glass.
8 7010.0000 Other 0 5
9 7200.3790 HRC/sheets In prime quality by 0 10
7208.3890 Sales Tax registered (for imports of
7208.3990 manufacturers of CRC/G.I HRC/sheets in
sheets or coils prime quality by
Sales Tax
registered
manufactures of
CRC/G.I sheets or
coils)
10 72.11 Flat-rolled products of iron or 0 5
non-alloy STEEL, of a width of
less than 600 mm, not clad,
plated or coated.
11 7612.9010 Round cans in diameter exceeding 0 S
45 mm
12 7612.9030 Of a capacity up to 400 mml and 0 5
bearing brand name and/or logo
13 83.07 Flexible tubing of base metal, 0 5
with or without fittings.
14 8507.2010 Sealed lead-acid batteries used 0 5
in telephone exchanges
15 8507.2090 Other 0 5
16 8507.9000 Parts 0 5
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