ISLAMABAD: The government has proposed several tax relief measures in Federal Budget for fiscal year 2023-24 such as no increase of duties on import of essential items, promoting trade & business activities, energy efficiency & conservation, IT technology and incentivizing agriculture sector, besides encouraging industrialization and investment.

Following are the proposed Custom Relief Measures:

-Exemption of Customs duties on specific papers and Art card and board for Printing of Holy Quran.
-Incentive for Pharma sector by including one more API and 03 drugs in the existing duty free regime.

-Incentive for manufacturing of Solar Panels and allied equipment by exempting customs duties on import of machinery, equipment and inputs for manufacturing of solar panels, inverters and batteries.

-Incentive for exporters of Information Technology (IT) and IT enabled services by allowing duty free import of IT related equipment equivalent to 1% value of their export proceeds.

-Reduction of Customs duties and additional Customs duties on import of intermediary/ industrial inputs falling under 10 PCT codes.

-Exemption of Customs duties on raw materials of Diapers, Sanitary Napkins and Adhesive Tape.

-Concession of Customs duty on raw materials/inputs for manufacturers of Capacitors.

-Reduction of Customs duty from 10% to 5% on non-localized (CKD) of Heavy Commercial Vehicles (HCVs).

-Exemption of ACD on import of raw materials of Hemodialyzers fluid / powder.

-Extension in exemption on machinery and equipment imported by erstwhile FATA areas till June, 2024.

-Continuation of concession on import of Flavouring powders for food preparation for manufacturers of snacks till June, 2024.

-Exemption of Customs duty on Organic Composite Solvent and Thinners for manufacturers of Butyl Acetate and Dibutyl Orthophthalates.

-Reduction of Customs duty on import of pet scrap for manufactures of polyester filament yarn.

-Exemption of Customs duties on Raw Materials for manufacturing of Moulds and Dies.

-Exemption of Customs duties on raw materials/ inputs for Mining machinery.

-Exemption of Customs duties on raw materials/ inputs for Rice mill machinery.

-Exemption of Customs duties on raw materials/ inputs for Machine tools.

-Alignment of Part(V) of Fifth Schedule to the Customs Act with Auto Industry Development and Export Policy (AIDEP) 2021-26.

-Exemption of Customs duties on import of seeds for sowing to promote growth in agricultural sector.

-Exemption of Customs duties on import of shrimps/prawns/juvenile for breeding in commercial fish farms and hatcheries.

-Exemption of Customs duties on roasted peanuts for manufacturing of ready to use supplementary foods (RUSF) by World Food Program certified manufacturers.

-Increase of Customs duty on Carbides of Calcium from 3% to 11% to protect the local industry.

REVIEW OF REGULATORY REGIME:

-Removal of regulatory duty on second hand clothing to provide relief to the poor segment of the society.
-Reduction of regulatory duty on 151 PCT codes pertaining to second hand clothing, fish, tiles, sports goods.
-Removal of regulatory duty on IT related equipment to encourage Information Technology sector.

-Removal of Regulatory duty on Synthetic Filament Yarn of Polyester not manufactured locally.
-Removal of Regulatory duty on parts for flat panels, monitors, projectors.
-Removal of Regulatory duty on Silicon Steel Sheets.
-Exemption of RD on special steel round bars and rods of non-alloy steel exceeding diameter 50 mm.
-Increase / levy of regulatory duty on import of articles of glass to protect the local industry.

-To discourage the use of inefficient Tungsten Filament Incandescent Bulbs, 20% RD imposed on these bulbs and their parts.

-Export Regulatory Duty on the export of Molasses increased from 10% to 15%.

MISCELLANEOUS:

-Creation of separate PCT Code for Smart Watches.
-Creation of separate PCT Code for wooden splints for Matches.
-Change in Description of PCT CODE 2501.0021.
-Change in Description of PCT CODE 8544.6010.
-Changes in Descriptions of PCT codes of localized auto parts.
-Conversion of Specific CD rate on Caustic Soda to Ad-Valorem rate.

REVENUE MEASURES:

-Withdrawal of capping of the fixed duties and taxes on the import of old and used vehicles of Asian Makes above 1300 CC under SRO 577(I)/2005 by omitting serial number 4,5 and 6 of the said SRO.

LEGISLATIVE CHANGES:

-Definition of smuggling is being proposed to be rephrased to enable Customs to conduct anti-smuggling operations within the territorial limits of the country.
-Provincial Levies and Khasadar Force have been proposed to be added in the list of Government agencies mandated to assist Customs in anti-smuggling operations in Khyber Pakhtunkhwa and Balochistan.

-Penal provisions for offence of smuggling of essential commodities are propo

sed to be made more stringent.
-Penal provisions for the offence of smuggling of banned and contra-banned goods are being proposed to be made more stringent.
-To ease out congestion at border customs stations, the mandatory time for filing of goods declaration after arrival of goods in the border customs station is proposed to be reduced.
-In order to facilitate the trade, the warehousing period for perishable items has been proposed to be enhanced from one month to three months.
-The penalty on documents not found inside the consignment abolished.
-The pitch of penalty on documents not uploaded electronically with the goods declaration is being rationalized to facilitate trade.
-In order to reduce the clearance time and to eliminate human interaction, option is being provided to the respondent to go for adjudication through Customs Computerized System.
-To facilitate the passengers travelling as a group who cannot file their own baggage declarations, the representative of the group of passengers is being allowed to file baggage declaration on behalf of the group members.
-To check revenue loss, penal provisions for any attempt to evade duty and taxes in breach of laws and procedures are being proposed to be made more stringent.

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