KARACHI: Federal government through the Finance Bill 2016 has granted 40-year exemption from sales tax and federal excise duty on imports and supplies to concession holder of Gwadar Port Authority and its operating companies, contractors and subcontractors for development of Gwadar Port and Gwadar Free Zone.
This exemption will be admissible only to China Overseas Ports Holding Company Limited (COPHCL) and its operating companies, their contractors and subcontractors which hold the concession agreement.
According to proposed procedure, Ministry of Ports and Shipping will certify that the imported materials and equipments are bona-fide requirement for construction and operation of Gawadar Port and development of Free Zone for Gawadar Port.
The Bill provides that the goods so imported will not be sold or disposed of without prior approval of the Federal Board of Revenue (FBR) and payment of sales tax leviable at the time of import.
Sales tax and FED is also exempted on local supplies, which would only be available to China Overseas Ports Holding Company Limited (COPHCL) and its operating companies, contractors, subcontractors holding the concession agreement.
For claiming exemption on goods which are otherwise taxable in Pakistan, the operating companies will purchase the materials and equipments for the construction of Gawadar Port and development of Free Zone for Gawadar Port from the sales tax registered persons only.
Government has also announced a 23-year sales tax and excide duty holiday to businesses to be established in Gwadar Free Zone. This exemption will be available to sales and supplies within the Gwadar Free Zone only.