Govt Shelves Plan to Exempt Import of Oxygen Tools from Duties

The federal government has put off the plan of exempting the import of oxygen gas, cylinders, and cryogenic tanks from taxes due to the lack of a clear procedure.

Sources told ProPakistani that the National Command and Operation Center (NCOC) had directed the Ministry of Industries & Production to evaluate and process the case for exemptions of duties and taxes on the import of oxygen plants, machinery, and tanks to industries due to the vague procedure.

The Ministry had proposed to the Economic Coordination Committee (ECC) to grant duty and tax exemption on import of oxygen gas, cylinders, and cryogenic tanks and oxygen concentrators/generators/manufacturing plants of all specifications and capacities under respective harmonized system codes for a period of 12 months on the expiry of previous exemption in November 2021.

At present, the Federal Board of Revenue is charging 3% Customs Duty (CD), 2% Additional Customs Duty (ACD), 17% sales tax, and 2% withholding tax on import of oxygen. Meanwhile, the tax department is also charging 20% CD, 7% ACD, 17% sales tax, and 5.5% withholding tax on the import of oxygen cylinders. Furthermore, there is 3% CD, 2% ACD, 17% sales tax and 5.5% withholding taxes on import of cryogenic (tanks/vessels).

The Ministry of Industries argued that due to the fourth wave of COVID in the country, exemption of taxes and duties should be granted on the import of oxygen gas, cylinders, and cryogenic tanks. According to the Ministry, two more oxygen projects (POL project 270MT/Day, Ghani chemicals project 275MT/Day) were being executed as the machinery orders had been placed in both these projects that were expected to be completed in the first quarter of 2023.

It is pertinent to note that the Ministry of Industries and Production moved on June 18, 2020 the summary regarding exemption of duty and taxes on import of oxygen gas, cylinders, and cryogenic tanks. The incentives approved in the summary relating to the import of oxygen gas, oxygen cylinders, and cryogenic tanks were applicable from June 23, 2020, for the period of three months, and expired on September 22, 2020.

Subsequently, another summary regarding tax-free import of cryogenic oxygen tanks moved by MoI&P was approved by ECC on December 24, 2020, and subsequently ratified by the cabinet in its meeting held on December 29, 2020.

The incentives approved in this summary relating to the import of cryogenic tanks have also expired.