KARACHI: The Federal Board of Revenue (FBR) has received representations from MCC Appraisement West that duty and tax concessions granted to telecom industry should be withdrawn as being leading consumer industry earning huge profits, it does not require special treatment.

“Since, cellular networks have matured reasonably in the country and are making huge profits, it is suggested the rate of Customs duty on cellular telecom equipment should be raised to 5.0 percent from existing 1.0 percent,” a document said.

It has been proposed that duty on sealed lead acid batteries used in telephone exchanges should be increased from 10 percent to 20 percent.

The Model Customs Collectorate (MCC) Appraisement-West has proposed to rationalize duty structure on certain importable products, which would result in increased revenue and discourage mis-declartation.

In its proposals for the budget 2015-16, MCC Appraisement West noted that flavors based on food stuff are classifiable under heading 2106.9030 if meant for preparation of food whereas flavors based on mixture of odoriferous substances meant for food industry are classifiable under heading 3302.1020. Line of demarcation between both the headings is very thin. In order to avoid mis-classification duty of 10 percent may be fixed for both the headings.

It is suggested that rate of duty on mineral oils should be increased from 5.0 percent to 10 percent; from 15 percent to 35 percent on floor carpets and other textile floor covering; from 5.0 to 10 percent on Copper Rod in Coil of maxium cross-sectional dimension exceeding 6MM, from 5.0 percent to 10 percent on Air compressors mounted on a wheeled chassis for towing; 10 percent to 20 percent on Parts for food grinders mixers and juice extractors etc.

With the difference of flat and other than flat cable, the difference of rate of duty is 15%, the anomaly may be removed by enhancing the duty rate on PCT 8544.4920 from 10% to 25%.

The proposals observed that duty and taxes on secondary quality Cold Rolled Steel Sheets in Coils and GP Steel Sheets in Coils comes higher than the prime quality, because tariff rate for secondary quality is 20 percent as against 10 percent for prime quality. In order to avoid higher tariff rate, importers attempt to clear secondary quality under the guise of prime. It is suggested that the tariff rate on prime may be enhanced from 10% to 15%, so that afore-mentioned mis-declaration could be avoided.

“It is proposed that the scope of the entry at S.No.11 of the SRO 551)I)/2008 may be categorically defined, in order to prevent the chances of misuse and to forestall disputes regarding applicability of the SRO.

To achieve this end, the existing open ended description of goods viz “Raw materials for the basic manufacture of pharmaceutical active ingredients and for manufacture of pharmaceutical products” may be replaced by making a specific reference to items covered under Table-III sub-tables A & B  may be made.  Secondly, a condition regarding prior approval / NOC by the Drug Regulatory Authority may be introduced so as to bring this exemption SRO at par with SRO 567(I)/2006, where such condition exists.

Items (Diagostic Kits etc) as provided for under SRO 880)I)/2007 are the same as covered vide sub-table E of Table-III of the SRO 567(I)/2006. Whereas approval of Drug Regulatory Authority is required in order to avail exemption of Customs Duty for items covered under the SRO 567(I)/2006, no such approval has been specified under the SRO 880(I)/2007, despite similarity of items. This is a discrepancy and needs to be removed.

MCC Apraisement West has proposed rescinding of the SRO 727(I)/2011 and upfront levy of 2% or 5% adjustable Sales Tax.

Definition of the word ‘levies’ has been proposed to be added in Customs Act; according to proposed definition “levies” means Special Customs Duty under section 18-A, 18-C, Sales Tax under section 3 of Sales Tax Act, 1990, Withholding Tax under section 148 of ITO, 2001 and Federal Excise Duty or Special Excise Duty under sections 3 & 3A of Federal Excise Act, 2005 or any other levy under Act of parliament.

An amendment has been proposed to Section 80(3) of the Act to provide legal cover to the reassessment made by the Officers of Customs after the release of goods on account of non-application of valuation ruling, mis-classification, in admissibility of SROs, etc further to meet the demand of natural justice opportunity of hearing is also provided through the amendment.

The goods declaration cleared through Customs Computerized System are not only examined but also assessed as per selectivity criteria.  Proposed amendment will enable the section to provide umbrella cover for clearances made through Green, Yellow and Red Channel of the Customs Computerized System selectivity criteria.