ISLAMABAD (July 09 2003) : The Central Board of Revenue (CBR) has strongly opposed any move to grant exemption of customs duty on the import of agriculture machinery, including tractors/harvesters and other farm equipment under the “agricultural package” being offered as per the new Trade Policy.
However, the final decision would be taken in the next meeting of the Cabinet after taking into consideration viewpoint of all the stakeholders, sources said.
It was proposed to allow duty-free import of tractors and farm machinery to farmers with land holding of 12.5 acres or above.
The CBR has rejected the proposal on the plea that the tractors up to 85 Horsepower (HP) were manufactured locally and, therefore, low rate of duty, ie 30 percent ad valorem should not be disturbed.
Furthermore, allowing tractors of higher capacity would indirectly hurt the local industry because of price margin.
Another proposal was floated to allow zero rate customs duty on the categories of equipment/farm machinery; all types of new and second hand farm machinery.
This includes tractors of horsepower, which are not manufactured in the country; power operated (new or second-hand) spray equipment for crops and orchards; harvesters for wheat and maize crops, including new and second-hand and duty-free import of spare parts of harvesters/tractors.
On the proposal, the CBR contested that all types of farm machinery, which was not manufactured locally was entitled for concession of whole of customs duty under SRO 358 (I)/2002, which included spray equipment and harvesters, etc.
Spare parts of harvesters and tractors should not be allowed free of customs duty for general import as these were already totally exempted from the duty under SRO 436 (I)/2001 for recognised assemblers.
Regarding import of second-hand machinery, the Commerce Ministry would be in a better position to respond, the CBR added.
The issue regarding import of spare nozzles, herbicide applicators, etc, had already been taken up with the Agriculture Ministry separately.