Exemption of Sales Tax of plant and Machinery

GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS AND REVENUE (REVENUE DIVISION) ***** Islamabad, the 7th June, 2003 Rescinded vide SRO 487(I)/2004 dated 12.06.2004 NOTIFICATION (SALES TAX) S.R.O. 505(I)/2003.-- In exercise of the powers conferred by sub-section (1) of section 13 of the Sales Tax Act, 1990, read with serial No. 44 of the Sixth Schedule thereof, the Federal Government is pleased to exempt from payment of sales tax plant and machinery, falling under chapter 84 or 85 of the first schedule to the Customs Act,1969, excluding such imported plants and machinery as are manufactured locally, purchased or imported for the use mentioned in the Table below, subject to the following conditions, namely: - (1) the importer or purchaser of locally manufactured machinery shall declare the use of the plant and machinery imported or locally purchased and shall also declare the intended site for the installation of said machinery; (2) the importer, or purchaser of the locally manufactured machinery, as the case may be, shall submit an indemnity bond, set out in Annex-I or II, to the extent of sales tax exempted under this notification binding himself to pay the sales tax so exempted, additional sales tax and penalties in case of his failure to fulfil the conditions specified in this notification, to the Collector of Customs or Collector of Sales Tax, as the case may be, in whose jurisdiction he or it is located. This indemnity bond shall not be discharged till the submission of installation-cum-production certificate as set out in Annex-III or IV, as the case may be, issued by an officer not below the rank of Assistant or Deputy Collector of Sales Tax of the respective jurisdiction within two years of the date of importation or purchase, as the case may be; (3) the machinery imported or purchased locally shall not be removed from the premises declared under clause (1) at the time of import or purchase before the expiry of five years of the date of bill of entry or goods declaration form or the date of sales tax invoice; and (4) the breach of any condition specified in this notification or non-submission of installation-cum-production certificate within the stipulated time, shall be deemed to be tax fraud and shall be punishable under the relevant provisions of the Sales Tax Act, 1990. Besides the sales tax exempted under this notification, additional sales tax and penalty shall be recovered under section 202 of the Customs Act, 1969, read with or under section 48 of the Sales Tax Act, 1990, as the case may be, in addition to any other penal action under the Customs Act, 1969 and the Sales Tax Act, 1990. TABLE (1) | (2) 1. | Seafood industry (farming, catching, processing and preservation of fish, shrimp and other marine products). 2. | Fruits, vegetables and flowers grading, processing, packing and preservation. 3. | Treatment and disposal of toxic and hazardous industrial wastes, sewerage, effluent or solid waste management, water purification or desalination plant. 4. | Diary and dairy products. 5. | Rice, grain and dried leguminous vegetables 6. | Sulphurous acid generators SAG-10 meant for de-alkalinization of soil. ANNEX-I [See condition (2)] INDEMNITY BOND THIS DEED OF INDEMNITY is made on the __________ date of __________ BETWEEN Messrs. __________ (hereinafter called “the importers” which means and includes their successors, 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, by its decision contained in Notification No. S. R. O. __________ dated the __________ and subject to the condition specified in the said notification, has been pleased to direct that such plant and machinery, as are not manufactured locally, shall be exempt from the whole of sales tax leviable thereon, in accordance with the said notification. NOW, THEREFORE, in consideration of the release of the machinery without recovery of leviable tax, the importers bind themselves to pay on demand to the Government of Pakistan the sum of Rs. __________ being the sales tax leviable, additional sales tax and penalties on the machinery, if the importers fail. (a) to produce an installation-cum-production certification from Assistant or Deputy Collector of Sales Tax or respective jurisdiction within two years from the date of the importation of the machinery, to the effect that the machinery has been installed for _____________________; and (the purpose) (b) to produce such other evidence as the Collector of Customs may require to satisfy himself that the plant or machinery 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 shall be recovered as arrears of customs duty under section 202 of the Customs Act, 1969 (IV of 1969). This bond shall be cancelled and returned 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 in the said notification. Signed by importer on this __________day of __________200___ Managing Director (Name and permanent address) Collector of Customs or his authorised officer (on behalf of the President) Witness: ______________________________________ (Signature, name, designation and full address) Witness: ______________________________________ (Signature, name, designation and full address) Note.-- The bond shall be written on appropriate non-judicial stamp paper and shall be witnessed by a Government servant in BPS-16 or above, an Oath Commissioner, a Notary Public or an officer of a Scheduled Bank. ________________________________________________________________________________________________________ ANNEX-II [See condition (2)] INDEMNITY BOND THIS DEED INDEMNITY is made on the __________ day of __________ BETWEEN Messrs. __________ (hereinafter called “the purchaser” which means and includes their successors, administrators, executors and assignees) of the one part, AND the President of Pakistan through the Collector of Sales Tax, __________ (hereinafter called “the Collector of Sales Tax”), of the other part. WHEREAS the Federal Government, by its decision contained in Notification No. S. R. O. __________ dated the __________ and subject to the conditions specified in the said notification, has been pleased to direct that such plant and machinery shall be exempt from the whole of sales tax leviable thereon, in accordance with the said notification. NOW, THEREFORE, in consideration of the supply of the machinery without recovery of leviable sales tax, the purchaser bind themselves to pay on demand to the Government of Pakistan the sum of Rs. __________ being the sales tax leviable on the machinery alongwith additional sales tax and penalties, if the purchaser fails-- (a) to produce an installation-cum-production certification from Assistant or Deputy Collector of Sales Tax of respective jurisdiction within two years from the date of purchase of the machinery, to the effect that the machinery has been installed for ____________________; and (the purpose) (b) to produce such evidence as the Collector of Sales Tax may require to satisfy himself that the plant or machinery has been installed in accordance with the conditions of the said notification. The purchaser further agree and bind themselves that the amount covered by this bond shall be recovered as arrears of sales tax under section 48 of the Sales Tax Act, 1990. This bond shall be cancelled and returned when the aforesaid certificate has been produced and the Collector of Sales Tax is satisfied that the purchaser has fulfilled all the conditions of this bond in the said notification. Signed by purchaser on this __________day of __________200___ Managing Director (Name and permanent address) Collector of Customs or his authorised officer (on behalf of the President) Witness: ______________________________________ (Signature, name, designation and full address) Witness: ______________________________________ (Signature, name, designation and full address) Note.- The bond shall be written on appropriate non-judicial stamp paper and shall be witnessed by a Government servant in BPS-16 or above, an Oath Commissioner, a Notary Public or an officer of a Scheduled Bank. _____________________________________________________________________________________________________ ANNEX-III [See condition (2)] INSTALLATION-CUM-PRODUCTION CERTIFICATION File No. ___________ Dated: ____________ Certificate No. ___________________ (Progressive S. No. started from 1st January every year) I, ___________ (name of Assistant or Deputy Collector of Sales Tax), am satisfied that the machinery imported by Messrs. __________ under the provisions of Notification No. S. R. O. __________ dated ___________ vide bill of entry or goods declaration form No. ___________ dated ___________ has been installed at the place ___________________________________________ and is being used for (address declared at the time of import)___________________ (the purpose declared at the time of import) DEPUTY OR ASSISTANT COLLECTOR OF SALES TAX _______________________________________________________________________________________________________ ANNEX-IV [See condition (2)] INSTALLATION-CUM-PRODUCTION CERTIFICATION File No. ___________ Certificate No. ________________________ Dated: ____________ (Progressive S. No. started from 1st January every year) I, ___________ (name of Assistant or Deputy Collector of Sales Tax), am satisfied that the machinery purchased locally by Messrs. __________ under the provisions of Notification No. S. R. O. __________ dated ___________ vide sales tax invoice No. ___________ dated ___________ purchased from Messers. ___________ having sales tax registration No. __________ has been installed at the place ___________________________ and is being used for (address declared at the time of purchase) ________________________________. (the purpose declared at the time of purchase) DEPUTY OR ASSISTANT COLLECTOR OF SALES TAX ____________________________________________________________________________________________________________ [C.No.1/5-STB/2003] (Zafar ul Majeed) Additional Secretary