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New list of locally-made goods for sales tax concession

ISLAMABAD (August 31 2007): The Federal Board of Revenue (FBR) has issued a new list of 906 'locally manufactured goods' for levying concessionary rate of customs duty and sales tax to discourage import of goods being produced by the domestic industry.

The board has issued Customs General Order (CGO) 11 of 2007 revising the “list of locally manufactured items” in consultation with the Engineering Development Board (EDB).

Officials said the revised list would ensure protection to the local industry, which has achieved the maximum production capacity in these items. The board has also issued instructions to the collectors of customs and sales tax for enforcement of the new general order for levying duties and taxes at concessionary rates on the import of different items.

According to the directive, the goods detailed in the list of this CGO are manufactured locally. This list is compiled and updated by the EDB in consultation with stakeholders. Henceforth, the list of locally manufactured goods is applicable to reference purposes to all the exemptions/concessionary notifications.

The collectors of customs and the staff responsible for allowing concessions under different notifications/orders are advised to follow this list for the purposes of allowing concessions from customs duties and sales tax, etc. The information, if any, along with evidence regarding the local manufacture of goods, not indicated in the list, may be forwarded to the FBR forthwith so that the list of locally manufactured goods/items is up-dated in consultation with the EDB.

The collectors are, however, authorised to allow release of goods/items indicated in the list of locally manufactured goods/items against bank guarantee for a period of three months if the importer produces a certificate issued by the renowned local manufacturers of the disputed items from the Engineering Development Board stating that the imported item is not being manufactured locally and the importer shall produce a clarification from the FBR to this effect within the above stated period of three months. This Customs General Order has superseded Chapter XI of CGO 12/2002 of June 2002 and all other instructions on the subject.

Under the new CGO, the anexures specified in the list should form the integral part of the CGO. The listed machinery/equipment/materials, etc include their substitutes, the concessionary import of which would also not be allowed.

However, the import of proprietary spares whose parent equipment is not manufactured locally shall be cleared as per terms of SRO 678(I)/2004. This is subject to the condition that proof of concessionary import (bill of entry or any other appropriate commercial document) of the parent equipment not manufactured locally. Secondly, undertaking by the importer would be submitted that the imported items are proprietary spares of the equipment mentioned and are certified as such either by the manufacturer (OEM) of integral sub-equipment of the parent equipment, as the case may be.

The list would be regularly updated by EDB (preferably after every six months) in the light of comments from local suppliers and users. The HS/PCT code specified in the last are purely for reference purpose.

The new list has also given detail specification and quantity supplied of free cutting and grinding balls steels being manufactured by Peoples Steel Mills Ltd, Manghopir, Karachi.

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