Concessionary customs duty and exemption of sales tax to Foreign Mining Companies on import of machinery, equipment, spares & chemicals etc.

GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE AND ECONOMIC AFFAIRS Islamabad, the 9th May,1996 NOTIFICATION (CUSTOMS) S.R.O.287(I)/96.- WHEREAS prior to the 21st December,1995, the Government of Pakistan had executed agreements with various public sector corporations for providing protection against fiscal changes; AND WHEREAS is it necessary to safeguard such contractual obligations to foreign investors; NOW, THEREFORE, in exercise of the powers conferred by section 19 of the Customs Act,1969 (IV of 1969), and sub-section (1) of section 13 of the Sales Tax Act,1990, the Federal Government is pleased to exempt the mining companies specified in the Appendix- (a) from payment of customs-duty in excess of 5 per cent ad valorem leviable under the First Schedule to the Customs Act,1969, and whole of the sales tax leviable under the Sales Tax Act,1990, on import of machinery, equipment, spares and chemicals as are not manufactured locally and specified in the Table below, till the commencement of commercial production; and (b) from payment of customs-duty in excess of 10 per cent leviable under the First Schedule to the Customs Act,1969, and whole of the sales tax leviable under Sales Tax Act,1990, on import of machinery, equipment, spares and chemicals, as are not manufactured locally and specified in the table below, after commercial production of such mining companies, subject to the following conditions, namely:- (i) the benefit of this Notification shall be available to foreign mining companies which have entered into agreement with Government of Pakistan or public sector corporations before the 21st December,1995; (ii) the importer shall; at the time of import of plant and machinery, make a written declaration on the bill of entry to the effect that the machinery and equipment has been imported for mining project and for the purpose specified in the bill of entry; (iii) the importer shall furnish an indemnity bond in the Form set out below to the extent of customs-duty and sales tax exempted under this Notification and the said bond shall not be discharged till production of installation certificate which shall be produced within one year from the date of importation of machinery and equipment from Assistant Collector, Customs and Central Excise, in whose jurisdiction the project is located and such certificate of verification would clearly state that the machinery and equipment imported for the purposes specified in the bill of entry have been duly installed or re-exported; and (iv) in the event of non-production of such certificate by the importer the Collector of Customs shall enforce the indemnity bond and proceed to recover the Government dues under section 202 of the Customs Act,1969, and the rules made thereunder. 1[Explanation.- For the purposes of this notification the expression "not manufactured locally" shall mean the goods which are not included in the list of locally manufactured goods, specified in the General Order, issued by the Central Board of Revenue.] TABLE S.NO. DESCRIPTION (1) (2) 1. Drilling rigs, rods, bits components. 2. Drill supports trucks. 3. Geophysical survey equipment. 4. Drilling muds and chemicals required for drilling. 5. Radio satellite wireless equipment. 6. Specialized vehicles designed or equipped with instruments or specialized equipment required for mining exploration. APPENDIX S. No. Name of Company Amount of the machinery and equipment of contract in US $ Millions. 1. Pasminco Australia Ltd. 78 2. BHP Minerals International Exploration Inc. 109 3. Oranmore Resource Limited. 38 FORM [See condition (iii) INDEMNITY BOND THIS DEED OF INDEMNITY is made on the _______________day of _________________BETWEEN Messers _________________ having registered office at ___________(hereinafter called "the importers" which expression shall include their successor, administrators, executors and assignees of the one part, AND the President of Pakistan through the Collector of Customs _________________(hereinafter called "the Collector of Customs") of the other part. WHEREAS the Federal Government has, vide its Notification No. S.R.O. ___________,dated the ________, and subject to the conditions specified in the said Notification, been pleased to direct that such machinery and equipment as is not manufactured locally, shall be exempt from so much of the customs-duty as is in excess of 5 per cent or, as the case may be, 10 per cent of such duty and whole of the sales tax leviable thereon, if imported in accordance with the said Notification; AND WHEREAS M/s.___________ have imported the machinery and equipment mentioned in the Schedule to this bond for the purpose of setting up units in accordance with the conditions specified in the said Notification; NOW, THEREFORE, in consideration of the release of the machinery and equipment without recovery of customs-duty in excess of 5 per cent or, as the case may be, 10 per cent of such duty and whole of sales tax leviable the importers bind themselves to pay on demand to the Federal Government the sum of Rs.________being the customs duty and sales tax leviable on the machinery and equipment, if the importers fail- (a) to produce installation certificate from the Assistant Collector of Customs and Central Excise, within one year from date of its import; and (b) to produce such other evidence as the Collector of Customs may require to satisfy himself that the machinery and equipment has been installed in accordance with the conditions of the said Notification. The importers further agree and bind themselves that the amount covered by this bond may be recovered as arrears of customs-duty under section 202 of the Customs Act,1969 (IV of 1969), and the rule made thereunder. This bond shall become void when the aforesaid certificate has been produced and the Collector of Customs is satisfied that the importers have fulfilled all the conditions of this bond and the aforesaid Notification. Signed by importers on this ____________________________________________day of _______________19 _____________________________________ (Authorized Officer) Name and permanent address Collector of Customs (On behalf of the President) WITNESS___________________________________________________________ (Signature, name , designation and full address) WITNESS_________________________________________________________ (Signature, name , designation and full address) NOTE:- This bond shall be witnessed by a Government servant in BPS 17 0r above or an officer of a scheduled bank. SCHEDULE OF MACHINERY AND EQUIPMENT IMPORTED. ( KHALID AKBAR ) Deputy Secretary (C.No.1(61)Mach./76.Pt.) As amended 1. Inserted vide S.R.O.715(I)/99, dated 12.06.1999