The Federal Board of Revenue (FBR) has allowed export-oriented units (EOU) to sell or transfer manufacturing plants and machinery to another exporter.
Such equipment is subject to exemption and concessions under export-oriented Small and Medium Enterprises Rules 2008.
The government had previously prohibited resale or transfer of such duty-exempted plants and machinery.
The officials said the FBR amended customs law to allow the collector of customs for sale or transfer of the plant, machinery, equipment, and apparatus from one EOU to another EOU.
A customs official said that the imported plant and machinery will remain subject to duty concessions even after a change in ownership from one to another export-oriented unit under the new rules.
The tax regulator also revised a rule linked to the disposal of goods in the domestic market by the EOUs.
As per the revised rules, domestic sale of goods may be permitted contingent on payment of duties and taxes relevant at the time of import, alongside payment of surcharge against Karachi interbank offered rate (KIBOR) plus 3 percent annum, to be determined from import date of input goods.
The tax regulator made it clear that the number of input goods for domestic sale shouldn’t cross 10 percent of total imports during the year.
The FBR also introduced a penalty in case of shortfall in export limit under the concessionary regime.
The customs officials said if the export shortfall is up to five percent the FBR will recover duty and taxes to the extent of input goods.
If the export shortfall is over 10 percent then the amount of surcharge would be recovered at Karachi interbank offered rate plus five percent per annum along with other applicable charges revealed the customs official.
Via The News