Renewable energy technologies: one-time exemption of taxes approved by ECC

The Economic Co-ordination Committee (ECC) of the Cabinet which met here on Tuesday with Finance Minister Dr Abdul Hafeez Shaikh in chair approved one-time exemption of taxes on renewable energy technologies. The ECC on a summary of the Ministry of Environment allowed one-time exemption of taxes on renewable energy technologies with a view to making this environment-friendly as well as affordable for general public and commercial purposes.
This included withdrawal of 5 percent customs duty, 16 percent sales tax, 2 percent commercial tax, 1 percent regulatory duty and 4 percent income tax on solar PV panels/modules LVD induction lamps. The ECC also approved one-time exemption of customs duty granted under SRO 812(1)/99.
An official said that a proposal by the Ministry of Commerce sought permission for import of 40-seater buses. To attract new investment in the auto manufacturing, the Ministry of Industries had proposed reduction in the existing import duty of 32.5 percent on the Complete-Knocked-Down (CKD) kits for the new investors to 5 percent in first year, 10 percent for second year and 20 percent for third year. The request stated that this incentive would help attract new investors - Chinese, Korean and Europeans - to assemble up to 100,000 units per annum in the country.
However, the Ministry of Commerce proposed that the components and CKD kits not manufactured locally should be taxed 50 percent of the existing rate of 32.5 percent of ad-valorem custom duty and for those manufactured locally at 50 percent of the prevailing rate of 50 percent of ad val custom duty. The Ministry of Commerce summary related to depreciation was not taken up.
According to a statement, the meeting discussed the agenda in detail and decided: direct tendering for urea import of .225million tons and the Chairman Trading Corporation informed the committee that they are going to tender for the supply of 1 lakh tons from the open market on March 7.
The ECC was also informed that at the same time the Economic Affairs Division is engaged in talks with Saudi Arabian Basic Industrial Corporation (Sabic) for the timely supply of urea. A high-level delegation would leave for Saudi Arabia in a day or two to take up the matter with them.
Earlier, Federal Minister for Food and Agriculture, Nazar Mohammad Gondal informed the committee about the urgent requirement of urea for the Rabi crop. He said the prices of urea are escalating in the open market due to its shortage and if the demand-supply issue was not resolved before the sowing of the crop, it will have negative impact on the overall Rabi crop and the economy.
The committee asked the Federal Ministers for Industries and Production, Food and Agriculture, Finance Secretary and Commerce Secretary to jointly monitor the timely arrival of the consignment to Pakistani ports and onwards distribution to farmers and utilisation of the 48,000 tons of urea stocked with TCP for the coming crops.
The committee also approved allocation of 7-10 mmcfd gas to Quetta Thermal Power Station, which was requested by the Ministry of Water and Power. The ministry of industries and production has requested the ECC of the Cabinet to issue explicit directives to the Federal Board of Revenue for allowing Swede Bus Company Limited (SBPL) to sell the subject buses without surrendering the exemption from customs duty granted under SRO 812 (1)/99 dated 01.7.1999, to facilitate release/sale of the buses parked at SBPL depot since 2005.
It may be recalled that SBPL had imported 32 Scania buses with Euro-II engines in 2003 for plying in Karachi under the Prime Minister's Urban Transport Strategy Plan, 1999 under SRO 812(1)/99 dated 01-7-1999, which provided exemption from custom duty.