ISLAMABAD: The Federal Board of Revenue (FBR) has resolved a major issue of the exporters by allowing duties and taxes free temporary import of artificial leather used in the manufacturing of export goods under SRO492(I)2009.
Sources told Business Recorder here on Thursday that the Sialkot Chamber of Commerce and Industry (SCCI) met Finance Minister Miftah Ismail along with Defence Minister Khawaja Muhammad Asif and raised the issue of restriction on the import of artificial leather under the SRO492(I)2009. This happened due to a FBR clarification issued in the past to disallow temporary import of artificial leather used in the manufacturing of export goods under SRO492 (I) 2009. Under the said SRO, the Board had exempted the whole of the customs–duty and sales tax on temporary importation of goods for subsequent exportation as specified in the Table of the SRO.492 (I) 2009.
The imported materials are used in the manufacturing of leather goods and leather garments and sports goods; garments and textile made–ups including foundation garments; furniture, woodware and fittings; textile designs, artwork, transparencies (bearing design for textiles) for the reproduction of finished goods; plush fabrics, nylon, polyester fibre, eyes and nose for use in stuffed toys; unit soles with heels, soles and heels for the manufacture of footwear and other items.
The export industry convinced the Minister that the legally SRO.492 (I) 2009 does not bar the import of artificial leather to be used in the export products.
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Finance Minister, while taking into account the legal status of the SRO and the viewpoint of both the FBR as well as the industry, directed the FBR to resolve the issue of exporters within the legal framework of the notification.
In a communication to the Customs authorities in the field formations here on Thursday, the FBR has clarified that the term “leather” refer to the animal leather falling under the PCT heading 41.07 whereas PU is an artificial leather falling under the HS code 3921.1300, hence not attracted by exclusion under serial number 1 of Table of SRO492(I)2009. Therefore, the temporary import of PU leather (artificial leather) is allowed under the SRO 492(I) 2009.
Through the new clarification, the FBR has restored the facility of temporary import of artificial leather used in the manufacturing of export goods under SR O492 (I) 2009.
Copyright Business Recorder, 2022