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ISLAMABAD: Minister for Science and Technology, Ch Fawad Hussain has opposed exemption of duty on import of those items which are locally manufactured, well-informed sources told Business Recorder.

On November 17, 2020, National Health Services, Regulations & Coordination Division noted that on a summary moved by them through the Revenue Division, the Federal Cabinet accorded approval to exemption from duties and taxes on import of 61 goods/items for the prevention and treatment of Covid-19, for a period of three years.

Pursuant to this, Ministry of Finance & Revenue and the FBR issued three SROs, on March 23, 2020, thereby promulgating the exemptions for a period of three months from the date of issuance of the notifications i.e. from March 20 to June 19, 2020, with the stipulation that the period may be extended for another three months by the Board, on the recommendation of MoNHSR&C, if adverse circumstances related to COVID-19 pandemic prevail.

Due to continued surge of COVID-19 and on the request of MoNHSR&C, FBR, SROs 555 & 556(1)12020 of June 19, 2020, extended the period of exemption for another period of three months, ie, from June 20 to September 30, 2020, after necessary approval of the Federal Cabinet, which was sought by the FBR.

In wake of prevalence of pandemic, NHS,R&C Division again approached FBR for extension in the period of exemption for another three months i.e. October to December 2020. However, FBR replied that approval of the Cabinet is mandatory before issuance/extension of any SRO/notification related to exemption of duties and taxes on import of goods.

The National Health Services, Regulations & Coordination Division solicited the approval of the Federal Cabinet, in terms of Rule 16(1) (d) of the Rules of Business, 1973, for extension of SROs 555(1) & SRO 556(1) under the Customs Act, 1969 and Sales Tax Act,1990 from October 01, 2020 to June 30, 2021 and extension of exemption from withholding Income tax from October 01, 2020 to June 30, 2021 by amendment in Clause(12B) of part IV of the Second Schedule to the Income Tax Ordinance.

During discussion, Minister for Science & Technology objected that import duty exemption on items being manufactured locally should not be granted as it would impact on the domestic industry. Minister for Industries & Production highlighted that verifiable production numbers for domestic production were not available and to obviate possibility of any shortage the proposal of MoNHSR&C may be approved. It was agreed that National Health Services, Regulations & Coordination Division would consult Science & Technology and Industries & Production Divisions and, if found viable, the import duty exemptions on locally manufactured items would be withdrawn. The FBR issued the notification a few days ago.

Copyright Business Recorder, 2020