ISLAMABAD (April 30 2004): The government has decided to exempt machinery/equipment to be imported for use at the proposed Special Economic Zone (SEZ) under the Gwadar Port Authority from the general sales tax (GST) and customs duty as per fiscal incentive package.
In this regard, the government is finalising Gwadar Special Economic Zone Bill to be announced in Budget 2004-05.
Sources told Business Recorder here on Thursday the business establishments and investors operating within the SEZ will be entitled to fiscal incentive subject to conditions/limitations of the federal government in consultation with the Gwadar SEZA.
Under the proposed incentive package, business establishments operating within the SEZ will be entitled to duty-free vehicles as per requirement of the offices and the businesses, they said, adding the manufacture and supply of all types of goods and services in the SEZ shall be exempted from all federal levies and taxes.
The sources said the exemption from customs duty, sales tax and central excise duty (CED) will be available on the import of all types of finished and unfinished goods, machinery, raw material, and equipment/apparatus into the SEZ.
Similarly, the exemption from the income tax will be available on the salary, profit, etc derived from the business under SEZ for a period of seven years from the date of commencement of business, said the sources, adding that units operating in the SEZ will be exempted from payment of provincial and local taxes.
Sources also said the Central Board of Revenue (CBR) and the Gwadar Port Authority will jointly work out a negative list of items, which could not be sold in the domestic market, adding the negative list will be regularly updated by the Authority in co-operation with the CBR.
They, however, said the goods manufactured by a business enterprise operating in the SEZ may be sold in the domestic market subject to payment of the prevailing import duties and taxes applicable to such goods imported into Pakistan.
Under the proposed incentives, all types of raw materials/goods, machinery, etc admitted into the SEZ from the tariff area would be deemed to be considered as exports from the tariff area and customs duty/sales tax paid thereon shall be returned to the exporters, the sources said.
Moreover, all types of finished and unfinished goods, machinery, raw material and equipment admitted into the SEZ from the tariff area shall be deemed to be considered as 'zero-rated' under the Sales Tax Act, 1990, they added.
Sources said the goods manufactured by a business enterprise operating within the SEZ may be sold in the domestic market, subject to payment of the prevailing import duty and taxes applicable to the goods imported into Pakistan.