ISLAMABAD (April 21 2003) : The Central Board of Revenue (CBR) has decided to restore exemption of customs duty on the import of machinery and equipment required for white oil pipeline project in the next budget (2003-2004).
The exemption was erroneously withdrawn in the budget 2002-2003, which needs rectification in the coming budget to facilitate early completion of the project.
At present, the custom duty is leviable on the imports made for the above-mentioned mega project worth 480 million dollars, but the budget error was not corrected despite lapse of around one fiscal year, hampering development work.
Official sources told Business Recorder here on Sunday that the import of machinery and equipment for white oil pipeline project was exempted from duty in 1998.
The tax authorities decided in the budget 2002-2003 to curtail the number of SROs as a part of the budget exercise, erroneously, taking up exemption SRO for the said project and merging it into the main SRO of petroleum-based projects.
Resultantly, the concerned SRO 236 (I)/98 was rescinded for subsequent placement in the standard SRO 367 (I)/94.
However, incidentally, the provision of exemption of duty on the import of machinery/equipment for white oil pipeline project was not placed in the major SRO 367 (I)94.
As the imports of said project were not added in SRO 367 (I)94 during the previous budget exercise, customs duty was due on the import of said project.
White oil pipeline project was required to be placed in the serial number 9 of the SRO 367 (I)94 dealing with the oil pipeline projects of oil transportation and distribution.
Under the standard notification, the government has exempted machinery/equipment, as are not manufactured locally, if imported for projects.
When this corespondent asked the concerned authorities that why the error was not rectified during the outgoing fiscal, they said that issuance of an exemption SRO might create some problems as the government has committed with the international donors not to allow any new exemption or extend time bound exemptions.