. .
A



 1. INTERNATIONAL   2. INDUSTRY
 3. FINANCE  4. POLICY
 5. TRADE  6. GULF

A

TRADE

June 24 - 30, 2002

EXPORT TARGET PERIOD EXTENDED

The government has extended the export target period for the industrial units for availing exemption from whole of customs duty and sales tax leviable at the time of importation of machinery.

Earlier, an industrial unit would have to achieve 50 per cent of the value of actual production in the first two years, and then each year the unit would have to achieve the 60 per cent export target of the value of actual production.

To give some more relaxation to these industrial units, the government has extended the export target of 50 per cent to be achieved within first three years, while the 60 per cent production would be achieved after succeeding three years.

The government had exempted customs duty and sales tax on machinery or spare parts thereof, as were not manufactured locally, imported for setting up a manufacturing unit or for the expansion, balancing, moderanization and replacement of existing units.

The notification reads as: "The Federal Government is pleased to direct that in its Notification No. S.R.O. 554(I)/98, dated the 12th June, 1998, the following further amendment shall be made and shall be deemed to have always been so made, namely: - In the aforesaid Notification, in the TABLE, after Sr. No. C in column (1), the following new serial number and the entries relating thereto in columns (1), (2) and (3) shall be added, namely: - D. Imports effected under Notification No. S.R.O. 962(I)/90, dated the 12th September, 1990, and Notification S.R.O. No.424 (I)/97, dated the 13th June, 1997. First two years. 50 per cent of the value of actual production. After succeeding three years 60 per cent of the value of actual production."

REMOVAL OF DRAWBACKS TO HIT CARPET INDUSTRY

The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has said the decision to abolish duty drawbacks from June 30 will hit the carpet industry hard which is already in a serious crisis because of the change in the par value of dollar and continuing recession in the US and Europe.

Commenting on the federal budget for the next fiscal, PCMEA chairman Abdul Latif Malik said in order to boost exports and revive the economy, some of the proposals in the budget would have to be revised and reformulated in order to provide special protection to export industries like carpets facing a difficult situation after 9/11 in the international market, especially in the US and Europe.

DUTY ON TEXTILE ITEMS, STEEL PRODUCTS CUT

The federal government has reduced the customs duty on stainless steel products, textile items, vehicles, while it has levied 10 per cent duty on high speed diesel and 5 per cent on some other products.

In the budget 2002-03, the government has lowered the maximum rate of duty from 30 per cent to 25 per cent and introduced four new duty slabs 25 per cent, 20 per cent, 10 per cent and 5 per cent.

Major items which have seen their duty lowered included tea, tyres, iron and steel products, paper, plastic and allied products, textile articles and auto parts.

The duty on stainless steel plates and alloy steel has been reduced from 10 per cent to 5 per cent; on 12 textile items from 20 per cent to 15 per cent; on 72 textile items from 20 per cent to 10 per cent; on 90 textile items from 10 per cent to 5 per cent

ENGG GOODS: DUTY ON RAW MATERIALS EXEMPTED

The government has exempted the customs duty on raw materials and components imported for the manufacturing of capital goods or engineering goods in the budget 2002-03.

The CBR issued a notification amending the SRO435 issued on June 18, 2001, to this effect.

According to the notification, the exemption would be available on the import of raw materials, which were not manufactured locally and meant primarily for export.

Under this facility, the goods must be supplied to the export sector or to exempt industrial units, projects and agencies.

PTA NOT SATISFIED WITH 5 PER CENT CUT IN DUTY

Pakistan Tea Association (PTA) has shown its dissatisfaction over budgetary measure of slashing import duty by five per cent as it feels that smugglers still have ample chance to dump tea through various channels.

The five per cent cut in duties will have little significance or impact on smuggling as import duty raised by five per cent in 2001-02 budget has merely been cancelled out. In real terms there has been no cut in import duty of tea, PTA said.

TEXTILE MACHINERY EXEMPTED FROM DUTY

The federal government has exempted textile machinery from customs duty in the budget of 2002-03. Central Board of Revenue (CBR) has issued a notification to this effect amending the SRO 431 issued on June 13, 1997.

The exemption will be available on components, sub- assemblies, assemblies and other items of machinery, as were not manufactured locally if imported by a local manufacturer for the manufacture and supply of complete unit or plant.

GWADAR WILL BE FREE PORT: SHAUKAT

Gwadar would be made a free port on the pattern of Jable Ali port in Dubai or other such ports in Saudi Arabia and China, Finance Minister Shaukat Aziz said.

"We have been promised by the UAE authorities to have all possible technical support for building a duty-free port at Gwadar," he said. Dredging work, he said, had already started at Gwadar where three berths would be built to complete the project in 30 months.