SRO 360(I)/2002

GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS AND REVENUE (REVENUE DIVISION) *** Islamabad, the 15th June, 2002. NOTIFICATION (CUSTOMS) S.R.O. 360 (I)/2002.- In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the following further amendments shall be made in its Notification No. S.R.O. 367(I)/94, dated the 9th May, 1994, namely: - In the aforesaid Notification, - (1) in the preamble,- (i) after the brackets, letters, words and figure “(IV of 1969)”, the words, brackets, figures and commas “and sub-section (1) of section 13 of the Sales Tax Act, 1990 (VII of 1990)”, shall be inserted; and (ii) for the words, brackets, letters, figures and commas “the Exploration and Production (E&P) Companies specified in column (4), against serial No.1, in column (1), of the table below, from the whole of customs-duties and others from so much of the customs-duty as is in excess of 10%”, the words, brackets and commas “from customs-duties and sales tax to the extent specified in columns (5) and (6) respectively of that Table,” shall be substituted; (2) in condition (1), for the word “certified” the word “recommended” shall be substituted; (3) after condition (3), the following new condition shall be added, namely, “3A. the Petroleum Sector Companies shall submit an account of all import invoices to the Regulatory Authority and the Collector of Customs for confirmation with their record at the time of annual payment;”

(4) in condition (4),- (i) after the words “customs-duties” wherever occurring the words “and sales tax” shall be inserted; (ii) for the words “Ministry of Commerce” the words “relevant Regulatory Authority” shall be substituted; (iii) for the words “for a further period of one year” the words “from time to time” shall be substituted; and (iv) in the proviso, for the word “transferred” the word “transferee” shall be substituted; (5) in condition (6),- (i) after the word “certificate” the words “to be furnished within a period of six months” shall be inserted; (ii) for the “semicolon” at the end, the fullstop shall be substituted and thereafter the following shall be added, namely:- “The dispute regarding the local manufacturing or otherwise shall be resolved through the Engineering Development Board;”; (6) in condition (8),- (i) for the words and comma “become scrap, junk or obsolete” the words and commas “become surplus, scrap, junk, obsolete or otherwise required to be disposed of” shall be substituted; and (ii) for the fullstop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:- “Provided that the items imported by E&P Companies which have been rendered scrap, with change in their physical status, composition or condition and PCT classification, will be dealt with as scrap and shall be chargeable to customs-duties and sales tax accordingly, at standard rates”;

(7) in the Explanation,- (i) serial number (i) and the entry relating thereto shall be omitted; and (ii) against entry at Sr.No. (iv), for the words, brackets, comma and letters “a committee headed by the Joint Secretary (Admn), Ministry of Petroleum and Natural Resources with a representative each of the concerned Regulatory Authority, PEPPCA and Service Companies as its members” the words “the concerned Regulatory Authority” shall be substituted; (8) for the table the following new table shall be substituted, namely:- TABLE S. Project description. Project phase. Category of import. Extent of No. exemption Customs Sales Tax Duty (1) (2) (3) (4) (5) (6) 1. Petroleum projects Exploration, i. Exploration and Whole. Whole. covered under petroleum development, production (E&P) concessions agreements, production, companies, their permits, licences and compression and contractors and sub- leases. enhanced contractors. recovery. ii. Companies Whole. Whole. providing services covering seismic, drilling, cementation, testing or similar type of services to E&P companies under a service contract. 2. Refinery projects. Establishment E&P Companies where Whole. Whole. (initial they establish a refinery installation), as a part of their field expansion, development. modernization and upgradation. 3. Oil and Gas Pipeline Oil transportation E&P companies where Whole. Whole. Projects. and gas they establish a pipeline.

(1) (2) (3) (4) (5) (6) transmission distribution (as determined by the relevant Regulatory Authority). 4. Liquefied Petroleum Gas Establishment E&P companies, Whole. Whole. (LPG) Projects. (initial corporations and installation), and organizations, where they expansion of LPG establish LPG facilities. processing and extraction plants, LPG bottling and handling facilities. 5. Compressed Natural Gas Establishment of E&P companies where Whole. Whole. (CNG) Projects. natural gas they establish CNG compression, facilities or market CNG. refilling and outlet facilities, the conversion of vehicles in CNG and transportation of CNG through specialized Vehicle Mounted Systems (SVMS). 6. Petroleum Terminal Establishment of E&P companies where Whole. Whole. Projects. port terminals they establish petroleum mainly used to terminal facilities. handle petroleum products including crude and fuel oil, LPG and CNG whether for import or export. 7. Energy Conservation, Energy E&P companies where Whole. Whole. Environment and Safety conservation, they import conservation, Control Projects. efficiency efficiency enhancement, enhancement, pollution control, pollution, environmental and safety environmental and equipment. safety control. 8. Construction and erection During all phases Exploration and Whole. Whole. of projects listed at S.No. listed at S.No. 1 to production companies 1 to S.No. 7 above. S.No. 7 above. their contractors and sub- contractors and service companies for the projects mentioned in column (2).

(1) (2) (3) (4) (5) (6) 9. Oil pipe line projects. Oil transportation Oil transmission, Whole. Nil. and distribution distribution companies, (as determined by corporations and the relevant organizations including its Regulatory contractors and sub- Authority). contractors for the purpose of construction and erection of project on an import-cum-export basis against a corporate guarantee equal to the value of import duties and taxes that would have otherwise been payable on import. Should the goods, etc., not be exported on the conclusion of the project or transferred with the approval of the relevant Regulatory Authority to another duty free pipe line project then the company, corporation and organization concerned shall be liable to pay duty and taxes chargeable on importation. 10. Refinery projects. i. Replacement Existing refineries. In excess Nil. of 10% ad val. ii. Establishment Refining companies, In excess Nil. (initial corporations, of 10% ad installation), organizations. val. expansion, modernization and upgradation. 11. Gas pipelines projects. Gas transmission Gas transmission, In excess Nil. and distribution distribution companies, of 10% ad (as determined by corporations and val. the relevant organizations. Regulatory Authority). 12. Petroleum terminal Establishment of Terminal companies, In excess Nil. projects. port terminals corporations and of 10% ad mainly used to organizations. val. handle petroleum items including crude and fuel oil, petroleum

(1) (2) (3) (4) (5) (6) products, LPG and CNG whether for import or export. 13. Compressed Natural Gas Establishment of i.CNG companies. In excess Nil. (CNG) Projects. natural gas of 10% ad compression, ii. Petroleum val. refilling and outlet marketing facilities, the companies, conversion of corporations and vehicles in CNG organizations. and transporation of CNG through specialized Vehicle Mounted Systems (SVMS). 14. Energy conservation, Energy Other corporations/ In excess Nil. environment and safety conservation, organizations, where they of 10% ad control projects. efficiency import conservation, val. enhancement, efficiency enhancement, pollution, pollution control, environmental and environmental and safety safety control. equipment. 15. Construction and erection During all phases All petroleum sector In excess Nil. of petroleum projects listed at S.No. 10 companies, corporations of 10% ad listed at S.No. 10 to S.No. to S.No. 14 above. and organizations val. 14 above. including their contractors and sub- contractors for the purpose of construction and erection of petroleum projects on an import- cum-export basis against a corporate guarantee equal to the value of import duties and taxes that would have otherwise been payable on import. Should the goods, etc., not be exported on the conclusion of the project or transferred with the approval of the relevant Regulatory Authority to another duty free petroleum project then the company, corporation and organization

(1) (2) (3) (4) (5) (6) concerned will be liable to pay duty and taxes chargeable on importation. (9) in the INDEMNITY BOND,- (i) in second paragraph, for the words and figure “as is in excess of 10%” the words “and sales tax as is specified” shall be substituted; and (ii) in fourth paragraph, for the words and figure “as is in excess of 10%” the words “and sales tax as is specified” shall be substituted. [C.No.1/2/Mach./2002] (Dr. Manzoor Ahmad) Additional Secretary