Components and Raw Materials Used in Oil an Dgas Exploration Equipment

COMPONENTS AND RAW MATERIALS USED IN OIL AND GAS EXPLORATION EQUIPMENTS Notifications No. S.R.O.444(I)/87, dated 4th June, 1987.___In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and section 7 of the Sales Tax Act, 1951 (III of 1951), the Federal government is pleased to direct that raw materials and such components as are not manufactured locally, and used in the manufacturer of oil and gas exploration equipment, hereinafter referred to a equipment, supplied to the Oil and Gas Development Corporation and Government approved oil and gas companies operating in the country, shall be exempt from payment of so much of the customs duty and sales tax as is in excess of 5-1/4% ad valorem subject to the following conditions, namely; the equipment shall be manufactured in a manufacturing bond in terms of Notification No. S.R.O. 68(I)/70dated 17th April, 1970 where the manufacturer shall have suitable in house manufacturing facilities; the manufacturer shall furnish to the Chief, Survey and Rebate, or any other officer authorized by the Central Board of Revenue in this behalf, in the prescribed form the list of equipment that he is manufacturing or intends to manufacture along with the details or raw materials and components require and the Chief or such authorized officer in consultation with the Collector of Customs or the concerned Government Department will certify the annual recruitment of various types or raw materials and components along with the quantity required for the manufacture of each items. Equipment supplied to the Oil and Gas Development Corporation and other Government approved oil and gas companies in the country shall not exceed 10% of the total value of equipment manufactured in a calendar year; The manufacturer shall chalk out deletion programme spreading over a maximum period of five years within which period he shall achieve a minimum deletion to the extent of 75% of the C&F value of the item and the continued availability of the exemption on domestic sales under this notification shall be contingent upon the achievement of progressive annual deletion duly approved by the Central Board of Revenue; and the manufacturers shall furnish to the Collector of Customs a bank guarantee or insurance guarantee equivalent to the customs duty and sales tax livable in excess of 5-1/4% ad val. on the inputs of equipment sold within the country. The bank guarantee or insurance guarantee shall be discharged on production by the manufacturer of a certificate from the concerned project that the equipment has been supplied to it within one year from the date of the local sale of the equipment.