FBR drafts Rules to govern import and export at CPEC Special Economic Zones and Gwadar Tax Free Zone

KARACHI: The Federal Board of Revenue (FBR) has notified the rules to govern the trade i.e import and export for Gwadar Tax Free Zone and Special Economic Zones under China Pakistan Economic Corridor.

A new Chapter XXXIX titled China Pakistan Economic Corridor (CPEC) is proposed to be included in Customs Rules, 2001.

The proposed Rules propose exemption granted under the Act and Ordinance shall be applicable to plant, machinery, equipment, apparatus and materials to be used solely within the limits of a free zone and to goods imported into the zone by the investors

Provided that plant, machinery, equipment and apparatus including capital goods imported shall be retained for a period of at least five years from the date of importation.

Plant and machinery imported under these rules may be surrendered at any time to the regulatory collectorate without payment of any customs duties and taxes for further disposal by the Collector.

Hazardous goods may be allowed to be admitted to a free zone only when a safe area  specially designed for its storage has been made available within the Free Zone to the satisfaction of the licensing authority and Customs as well as such conditions under relevant national laws have been complied with.

Input goods, other than plant and machinery, admitted to a free zone by an investor shall be consumed within two years from the date of entry into the zone. For duly justified reasons, extension may be granted for another one year by a written approval of an officer not below the rank of Collector of Customs.

Duty and tax free vehicles shall be allowed to be imported by the concession holder and its operating company for construction, development and operations of Gwadar Port and free zone area under the regulatory mechanism. The regulatory mechanism for such vehicles, including the number and types importable, shall be devised by the Ministry of Port and Shipping and FBR, in consultation with the Provincial  government if so required, and shall be notified by the FBR.

Investor operating in the free zone and employing up to twenty five workers shall be entitled to import or purchase one duty/tax free coaster, while investors employing more than twenty five shall be entitled to import or purchase one duty/tax free bus up to fifty seats.

Investors having exports of five million US $ or more per annum shall be entitled to import or purchase one duty/tax free cargo vehicle or truck and one motor car up to 1600 CC subject to verification of the amount of exports and approval by the Collector of Customs.

An investor providing logistic services may import vehicles and equipment, free of leviable duty and taxes proportionate to their operational requirements determined under the regulatory mechanism devised under sub-rule (9) and after recommendation from the Authority.

A goods declaration in respect of goods exported into the zone shall be presented to Customs authorities of the regulatory collectorate for processing and clearance accompanied by the documents showing details as required under the Act and the rules made thereunder.

Goods which are entitled to exemption or repayment of Customs-duties and sales tax on exportation shall qualify for such exemption or repayment immediately after  hese have been admitted into a free zone as per Act, Ordinance and rules made thereunder.

Petty items shall be admitted in the free zone under rule 844. After clearance of export goods declaration filed by tariff area exporter, the free zone investor shall file corresponding goods declaration for import (import tariff) so that the goods are credited to the free zone investor.

Any goods removed from a free zone for exportation to foreign countries shall be exported under the export procedure as laid down in the Act and the rules made thereunder.

A goods declaration under this rule shall be presented to the Customs authorities for clearance along with documents showing such details as required under the Act and the rules made thereunder.

All Customs formalities regarding clearance of goods shall be completed at the designated customs examination and assessment area for clearance of goods within the free zone.

In special circumstances, an investor may request for examination of goods at his business premises which may be allowed by the Collector for duly justified reasons.

Provided that a post examination Pakistan Customs Container Sealing System (PCCSS) seal shall be applied to the container examined at the business premises and the container number and seal number shall be entered in to the system.

Subject to the approval of Collector, the investors licensed as industrial units in the free zone shall be allowed to provide sub-contracting or vendor services for units of the Tariff Area. The subcontracting shall be allowed only for partial processing, embellishment, decoration or further manufacturing.

The draft can be loaded here: 20211201415627438SRO47OF2021-CUSTOMSRULES

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