concession on import appendx-ii

11

APPENDIX II

CONCESSION ON THE IMPORT OF MACHINERY ANDEQUIPMENT

S.No

S.R.O.No. Date Description PageNo.

1. S.R.O.367(I)/94 09.05.1994 Exemption of customs duty as is inexcess of 10% ad val on machinery,equipment materials etc. imported forthe projects of petroleum sector(Petroleum Policy).

13

2. S.R.O.71(I)/95 19.01.1995 Exemption from 25% of customs dutyleviable on the import of raw materialsfor manufacture of goods by suchindustries which commencecommercial operation upto 30.06.1999in Special Industrial Zones.

21

3. 287(I)/96 09.05.1996 Concession to Foreign MiningCompanies on import of machinery,equipment, spares chemicals.(Exemption from customs duty as is inexcess of 5% ad valorem and whole ofsales tax, till the commencement andfrom customs duty as is in excess of10% ad valorem and whole of sales taxafter commencement of commercialproduction).

24

4. S.R.O.431(I)/97 13.06.1997 Exemption of customs duty on importof components, sub-assemblies andassemblies(as are not manufacturedlocally) to the extent of 10% age pointsas compared with leviable rates on thefinished goods to be produced by suchimported components, sub-assembliesand assemblies.

27

5. S.R>O.38(I)/98 21.01.1998 Exemption of whole of customs dutyand sales tax on import of machinery,equipment on conversion kits andcylinders, if imported by CNGcompanies during the periodcommencing from 1st November,1997to 31st October,2002.

29

6. S.R.O.554(I)/98 12.06.1998 Exemption of customs duty and salestax on machinery or spares thereof, asare not manufactured locally, importedfor setting up a manufacturing unit or

34

12

for the expansion, balancing,modernization and replacement ofexisting units.

7. S.R.O.767(I)/2000 23.10.2000 Exemption of customs duty in excess of10% and whole of sales tax on plantand machinery imported for Newpassenger terminal complex at Lahoreairport.

37

8. S.R.O.438(I)/2001 18.06.2001 Partial exemption of customs duty onmachinery equipment and constructionmaterial not manufactured locally.

44

9. S.R.O.439(I)/2001 18.06.2001 Partial exemption of customs duty onplant, machinery and equipmentimported by certain industries.

48

13

GOVERNMENT OF PAKISTANMINISTRY OF FINANCE, REVENUE AND ECONOMIC AFFAIRS

(REVENUE DIVISION)

NOTIFICATION

Islamabad ,the 9th May,1994.

CUSTOMS

S.R.O.367(I)/94.- In exercise of the powers conferred by section 19 of the Customs Act,1969 (IVof 1969) and sub-section (1) of section 13 of the Sales Tax Act,1990 (VII of 1990), the Federal Government ispleased to exempt the machinery, equipment, materials, specialized vehicles, accessories, spares, chemical andconsumables, as are not manufactured locally, if imported for the projects mentioned in column (2) of the tablebelow for the phases and by the importers mentioned in columns (3) and (4) respectively of that table, fromcustoms-duties and sales tax to the extent specified in columns (5) and (6) respectively of that Table leviableunder the First Schedule to the Customs Act, 1969 (IV of 1969), subject to the following conditions, namely :--

(1) Only such machinery, equipment, materials, specialized vehicles, accessories, spares,chemicals and consumable shall be entitled to the exemption under this notification, asare recommended by the relevant Regulatory Authority from time to time in terms ofAnnexure VI to the Petroleum Policy,1994. The relevant Regulatory Authority shalltake such measures as it deems necessary to ensure that the concerned companies,corporations and organizations entitled to avail exemption under this notification importonly machinery, equipment, materials, specialized vehicles, accessories, spares,chemicals and consumables as is approved by the said Regulatory Authority in view oftheir actual project requirements;

(2) Exemption available to E & P companies sector, S.No.1 of the table, shall be admissibleonly to such E & P companies who hold permits, licences, leases and who enter intosupplemental agreements with Government of Pakistan in terms of the said PetroleumPolicy or those who sign new petroleum concession agreements on or after 1stJanuary,1994. Exemption under rest of the S.Nos. of the table shall be available to E &P companies without any such conditions;

(3) In respect of goods imported under S.No.1(i) of the table, after the first CommercialDiscovery has been made in the concession area, the respective Operator shall pay tothe Collector of Customs on an annual deferred basis a consolidated fee equal to 3% ofthe total invoice value of the equipment, materials, specialized vehicles , accessories,spares, chemicals and consumables imported by it, its contractors and sub-contractorsafter the first Commercial Discovery of all activities in the area including but not limitedto exploration activities in that particular concession area during the year. Goodsimported under S.No.2 to S.No.8 of the said table shall not be subjected to suchconsolidated fee. Items imported free of import duties under S.No.1(ii) of the table ifsold to E & P companies as part of their services will be included in the total invoicevalue for calculation of the fee payable by the Operator. The value to be taken for theservice company items for inclusion in the total invoice value shall be their invoicevalue at the time of import. The Operator shall submit an account of all import invoicesto the Regulatory Authority and the Collector of Customs for confirmation with theirrecord at the time of annual payment. This provision will also apply to OGDC and otherlocal E & P companies who hold mining, development and production leases and havenot been required to enter into any agreement with the Government of Pakistan;

(3A) The petroleum Sector Companies shall submit an account of all import invoices to theRegulatory authority and the Collector of Customs for confirmation with their r3ecord atthe time of annual payment;

(4) The Petroleum sector companies or importers shall furnish to the Collector of Customsan Indemnity Bond in the form set out in the Annexure below to the extent of customs-

14

duties and sales tax exempted under this Notification on the import of items of the valuespecified in the import authorization issued by the Regulatory Authority. The IndemnityBond shall be valid for a period of five years for the amount of customs-duties and salestax payable and exempted on import of item covered under the above referred importauthorization. The Bond shall be discharged on production of a certificate set out in theAnnex-I duly countersigned by the Regulatory Authority or its authorizedrepresentative to the effect that items imported under the specified import authorizationhave been duly installed or consumed or used or have been scrapped in the prescribedmanner. The Bond shall be extended from time to time if the relevant RegulatoryAuthority recommends such extension for any reason or shall direct for substitution ofsuch Bond for outstanding amount of customs-duty and sales tax on any item transferredto another Petroleum sector company entitled to import of such items under thisNotification;

Provided that the transferee company furnishes a similar Indemnity Bond in theform set out in the Annexure below;

(5) In the event of non-production of such certificate as aforesaid by the importer, theCollector of Customs shall enforce the indemnity bond and proceed to recoverGovernment dues under section 202 of the Customs Act, 1969 (IV of 1969), and therules made thereunder;

(6) In the event a dispute arises whether any item is entitled to the exemption under thisnotification, the item will be immediately released by the Customs Department against acorporate guarantee. A subsequent to be furnished within a period of six months fromthe relevant Regulatory Authority that the item is covered under this notification shall begiven due consideration by the Customs Department towards finally resolving thedispute. The dispute regarding the local manufacturing or otherwise shall be resolvedthrough the Engineering Development Board;

(7) In the event that an emergency condition occurs in connection with operations by apetroleum sector company which seriously endangers life or property or the operationsof the project, the relevant Regulatory Authority shall declare an emergency and theoperating company shall be allowed to import any item or items considered necessaryby the said company to deal with the emergency under intimation to the RegulatoryAuthority without fulfilling such formalities as are likely to cause delay and suchformalities will be attended to thereafter as soon as practicable; and

(8) Items imported free of import duties or at concessionary rates which become surplus,scrap, junk, obsolete or otherwise required to be disposed of in the following manner,namely:-

(i) in the event an item other than vehicles, is sold to another company in thepetroleum sector no import duties shall be levied or charged. If the item isnot sold to another petroleum sector company it shall be sold through apublic tender and duties shall be recovered at the rate of 10% ad val. of thesale proceeds;

(ii) for vehicles there would be a minimum retention period of five years afterwhich the vehicles may be disposed of in the manner provided in (i) aboveexcept that the full rate of import duties, net of any import duties alreadypaid, shall be charged subject to an adjustment of depreciation @ 2% permonth up to a maximum of twenty-four months. Vehicles can be surrenderedat any time to the Government of Pakistan without payment of any importduties under intimation to the Central Board of Revenue; and

(iii) any item imported free from import duties or on concessionary rate underthis notification may be exported for replacement, repair, modification or

15

renovation and may be re-imported without the payment of additional importduties subject to the production of certificate from the Regulatory Authoritythat the item needs to be exported for replacement, repair, modification, orrenovation and a corporate guarantee for re-import by the exportingcompany:

“Provided that the items imported by E&P Companies which have beenrendered scrap, with change in their physical status, composition or conditionand PCT classification, will be dealt with as scrap and shall be chargeable tocustoms-duties and sales tax accordingly, at standard rates.”.

Explanation.- In this notification,-

(i) Omitted;(ii) "invoice value" means value as ascertained by the Collector of

Customs; and(iii) "Regulatory Authority" means the relevant Regulatory Authority

specified in Annexure VI to the Petroleum Policy, 1994.(iv) Exploration and Production Companies and Service Companies

can import single or double cabin pickups and vehicles withmounted equipment and other specialized field vehicles withoutany restriction, keeping in view their work requirement and on therecommendations of the concerned Regulatory Authority;

(v) The expression "not manufactured locally" shall mean the goodswhich are not included in the list of locally manufactured goods,specified in the General Order, issued by the Central Board ofRevenue.

TABLE

Extent ofexemption

S.No.

Project description. Project phase. Category of import.

CustomsDuty

SalesTax

(1) (2) (3) (4) (5) (6)

1. Petroleum projects coveredunder petroleumconcessions agreements,permits, licences andleases.

Exploration,development,production,compression andenhanced recovery.

i. Exploration andproduction (E&P)companies, theircontractors and sub-contractors.

Whole. Whole.

ii. Companiesproviding servicescovering seismic,drilling,cementation, testingor similar type ofservices to E&Pcompanies under aservice contract.

Whole. Whole.

2. Refinery projects. Establishment(initial installation),

E&P Companies wherethey establish a refinery

Whole. Whole.

16

expansion,modernization andupgradation.

as a part of their fielddevelopment.

3. Oil and Gas PipelineProjects.

Oil transportationand gastransmissiondistribution (asdetermined by therelevant RegulatoryAuthority).

E&P companies wherethey establish a pipeline.

Whole. Whole.

4. Liquefied Petroleum Gas(LPG) Projects.

Establishment(initial installation),and expansion ofLPG processing andextraction plants,LPG bottling andhandling facilities.

E&P companies,corporations andorganizations, wherethey establish LPGfacilities.

Whole. Whole.

5. Compressed Natural Gas(CNG) Projects.

Establishment ofnatural gascompression,refilling and outletfacilities, theconversion ofvehicles in CNGand transportationof CNG throughspecialized VehicleMounted Systems(SVMS).

E&P companieswhere they establishCNG facilities ormarket CNG.

Whole. Whole.

6. Petroleum TerminalProjects.

Establishment ofport terminalsmainly used tohandle petroleumproducts includingcrude and fuel oil,LPG and CNGwhether for importor export.

E&P companies wherethey establish petroleumterminal facilities.

Whole. Whole.

7. Energy Conservation,Environment and SafetyControl Projects.

Energyconservation,efficiencyenhancement,pollution,environmental andsafety control.

E&P companies wherethey importconservation, efficiencyenhancement, pollutioncontrol, environmentaland safety equipment.

Whole. Whole.

8. Construction and erectionof projects listed at S.No. 1to S.No. 7 above.

During all phaseslisted at S.No. 1 toS.No. 7 above.

Exploration andproduction companiestheir contractors andsub-contractors andservice companies forthe projects mentionedin column (2).

Whole. Whole.

17

9. Oil pipe line projects. Oil transportationand distribution (asdetermined by therelevant RegulatoryAuthority).

Oil transmission,distribution companies,corporations andorganizations includingits contractors and sub-contractors for thepurpose of constructionand erection of projecton an import-cum-export basis against acorporate guaranteeequal to the value ofimport duties and taxesthat would haveotherwise been payableon import. Should thegoods, etc., not beexported on theconclusion of theproject or transferredwith the approval of therelevant RegulatoryAuthority to anotherduty free pipe lineproject then thecompany, corporationand organizationconcerned shall beliable to pay duty andtaxes chargeable onimportation.

Whole. Nil.

10. Refinery projects. i. Replacement Existing refineries. In excessof 10%ad val.

Nil.

ii. Establishment(initialinstallation),expansion,modernizationandupgradation.

Refining companies,corporations,organizations.

In excessof 10%ad val.

Nil.

11. Gas pipelines projects. Gas transmissionand distribution (asdetermined by therelevant RegulatoryAuthority).

Gas transmission,distribution companies,corporations andorganizations.


Nil.

12. Petroleum terminalprojects.

Establishment ofport terminalsmainly used tohandle petroleumitems includingcrude and fuel oil,petroleum products,LPG and CNGwhether for importor export.

Terminal companies,corporations andorganizations.


Nil.

18

13. Compressed Natural Gas(CNG) Projects.

Establishment ofnatural gascompression,refilling and outletfacilities, theconversion ofvehicles in CNGand transporation ofCNG throughspecialized VehicleMounted Systems(SVMS).

i.CNG companies.

ii. Petroleum marketing

companies,corporations andorganizations.


Nil.

14. Energy conservation,environment and safetycontrol projects.

Energyconservation,efficiencyenhancement,pollution,environmental andsafety control.

Other corporations/organizations, wherethey importconservation, efficiencyenhancement, pollutioncontrol, environmentaland safety equipment.


Nil.

15. Construction and erectionof petroleum projects listedat S.No. 10 to S.No. 14above.

During all phaseslisted at S.No. 10 toS.No. 14 above.

All petroleum sectorcompanies, corporationsand organizationsincluding theircontractors and sub-contractors for thepurpose of constructionand erection ofpetroleum projects onan import-cum-exportbasis against a corporateguarantee equal to thevalue of import dutiesand taxes that wouldhave otherwise beenpayable on import.Should the goods, etc.,not be exported on theconclusion of theproject or transferredwith the approval of therelevant RegulatoryAuthority to anotherduty free petroleumproject then thecompany, corporationand organizationconcerned will be liableto pay duty and taxeschargeable onimportation.


Nil.

19

ANNEXURE

[See condition (4) ]

(On appropriately stamped non-judicial paper)

INDEMNITY BOND

THIS DEED OF INDEMNITY is made on the _________________day of______________BETWEEN Messers___________ having registered office at _____________(hereinaftercalled "the importer" which means and includes their successors, administrators, executors and assignees), ofthe one part, AND the President of Pakistan through the Collector of Customs(hereinafter called "the Collectorof Customs"), of the other part;

WHEREAS the Government of Pakistan has, by its decision contained in NotificationS.R.O.367(I)/94 dated the 9th May,1994 and subject to the conditions given in the said Notification, beenpleased to direct that machinery, equipment, materials, specialized vehicles, accessories, spares, chemicals andconsumables as are not manufactured locally shall be exempt from so much of the customs-duty and sales taxas is specified if imported for the projects specified in the table of the said Notification.

AND WHEREAS M/s __________________________having registered office at__________________have imported the goods mentioned in the Schedule (please specify in the Schedule thedescription and quantity of goods imported) to this Bond for the purpose of (please specify the particulars ofthe project and phase of the project).

NOW, THEREFORE, in consideration of the release of the goods on payment of customs-dutiesand sales tax as is specified the importers bind themselves to pay on demand to the Government of Pakistanthe sum of Rs.________________being the customs duty leviable on the goods, if the importers fail toproduce a certificate of vertification form the Regulaotory Authority within such period as it may approve inaccordance with condition (4) of this Notification.-

(i) to produce a certificate of verification from the concerned Assistant Collector ofCustoms and Central Excise, within the period as approved by the relevant RegulatoryAuthority as required under the said Notification; and

(ii) to produce such other evidence as the Collector of Customs may require to satisfyhimself that the goods have been installed, used, consumed, scrapped, retained in theproject inventory or transferred, as the case may be, in accordance with the conditions ofthe said Notification.

The importers further agree and bind themselves that the amount covered by this Bond may berecovered as arrears of customs-duties under section 202 of the Customs Act, 1969 (IV of 1969) and the rulesmade thereunder.

This Bond shall be rendered void when the aforesaid certificate has been produced and theCollector of Customs is satisfied that the importers have fulfilled all the conditions of this Bond and theaforesaid Notification.

Signed by the importers on this _______________________day of _______________________19.

( Authorised Officer ) Name and permanent address

Collector of Customs ( on behalf of the President )

Witness___________________________________________

20

(signature, name, designation and full address).

Witness___________________________________________(signature, name, designation and full address).

Note.- The amount of indemnity bond may be reduced by the Collector of Customs, if any company,corporation or organization produces a certificate from the concerned Assistant Collector ofCustoms and Central Excise to the effect that part of the goods covered under the indemnity bondhas been installed, used or consumed, as the case may be, in terms of the said Notification duringthe validity period of the indemnity bond.

ANNEXURE-I

CERTIFICATE

I, Mr. _____________M/s ___________________________________certify that all the items or

the items indicated in the enclosed list imported vide Index No. ________of an IGM No. _________ dated

__________under Indemnity Bond No. _______dated _______have been duly installed or consumed or wed,

or have been scrapped in the prescribed manner or transferred to M/s ___________dated ________(copy

enclosed) issued by the Ministry of Commerce and indemnity bond furnished by that company is enclosed. It

is, therefore, requested that the indemnity bond No.________ dated ________for the amount of Rs.

_______may be allowed release or a certificate may be issued for the release of the Indemnity Bond, if

misplaced.

Name____________________

Designation_______________

Countersigned by Regulatory AuthorityName___________________________

Designation ______________________

Officer's Seal ___________________________________________________

SCHEDULE

_________________________________________________________________________________________[F.No.1(7)-Mach/94-49/94]

( RIAZ HUSAIN NAQVI ) Additional Secretary

[As amended]S.R.O.573(I)/94, - dated 09.06.1994S.R.O.1091(I)/94. - dated 08.11.1994S.R.O.73(I)/96, - dated 22.01.1996S.R.O.382(I)/96, - dated 13.06.1996.S.R.O.751(I)/98, - dated 29.06.1998S.R.O.692(I)/99, - dated 12.06.1999S.R.O.1082(I)/99, - dated 25.09.1999S.R.O.360(I)/2002 - dated 15.06.2002.

GOVERNMENT OF PAKISTANMINISTRY OF FINANCE, REVENUE AND ECONOMIC AFFAIRS

21

(REVENUE DIVISION)

Islamabad, the 19th January, 1995

NOTIFICATION(CUSTOMS)

S.R.O. 71(I)/95.- In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IVof 1969), and sub-section (1) of section 13 of the Sales Tax Act, 1990, the Federal Government is pleased todirect -

(a) that all such industries, excluding those specified in the table below, which commencecommercial operations upto the 30th June, 1999, in Special Industrial Zones whoselocations and perimeters shall be notified by Board of Investment and whose letters ofcredit are opened upto the 31st January, 1996, shall be exempt from twenty-five percentof the customs-duty leviable under the First Schedule to the Customs Act, 1969 (IV of1969), on the import of such raw materials which are not produced locally for themanufacture of their goods; and

(b) all such industries, excluding those specified in the table below, which are not alreadyexisting till the date of this notification in Pakistan and are set up in Special IndustrialZones shall be exempt, for a period of ten years, from whole of customs-duty leviableunder the First Schedule to the Customs Act, 1969 (IV of 1969), and sales tax on importof raw materials which are not produced locally provided the letters of credit for theirplant and machinery are opened upto the 31st January, 1996, and commercial operationsare commenced upto the 30th June, 1999, subject to the following conditions, namely:-

(i) For industries covered, under (a) above the project shall cost more than US $ten million and should employ minimum one hundred persons;

(ii) the manufacturer has suitable in-house facilities for manufacture of goods inrespect of which he claims exemption under this notification;

(iii) the manufacturer shall furnish to the Chief, Survey and Rebate, CentralBoard of Revenue, or any other officer authorized in this behalf the list ofgoods he is manufacturing or intends to manufacture alongwith the details ofraw materials required and the Chief or such authorized officer, as the casemay be, in consultation with the Collector of Customs, Collector of CentralExcise or Collector of Sales Tax shall certify the annual capacity of the unitfor the manufacture of such goods and total requirement of various types ofraw materials alongwith the quantity required for the manufacture of eachitem;

(iv) in the case of industries covered under (b) above, the manufacturer shall, atthe time of import of raw materials, make a written declaration on the bill ofentry to the effect that the raw materials have been imported in accordancewith the conditions specified in this notification;

(v) at the time of import, the manufacturer shall furnish to the Collector ofCustoms an indemnity bond in the form set out below and post-dated chequein the amount equivalent to the customs-duty and sales tax exempted underthis notification to abide by the conditions laid down in the Notificationfailing which conditions he shall pay the customs-duty and sales tax leviableon each consignment in excess of any other penalties that may be imposed bythe Collector of Customs in this behalf;

(vi) the manufacturer shall maintain record of the raw materials and componentsmanufactured out of them in such form as may be prescribed by the CentralBoard of Revenue;

(vii) the manufacturer shall within one year of the date of filing of bill of entry forhome-consumption or ex-bond bill of entry relating to raw materials, applyto the Collector of Customs for discharging the bond and the applicationshall be supported by a consumption certificate in the Form-I set out below,

22

issued by the Assistant Collector Customs and Central Excise within whosejurisdiction the manufacturing unit is located;

(viii) in case the Assistant Collector, Central Excise and Customs, is not satisfiedregarding the consumption of imported raw materials he shall report hisfindings to the concerned Collector of Customs who shall initiate action forencashment of post-dated cheque and penal proceedings for giving falsedeclaration; and

(ix) the manufacturer shall maintain a record of the sale of the manufacturedgoods and machinery in Form-II set out below and shall produce on demand,such record and other evidence of sales as may be required for inspection byan officer of Customs not below the rank of Assistant Collector of Customsin whose jurisdiction the manufacturing unit is located or nay other officerauthorized by the Central Board of Revenue in this behalf.

Explanation.- For the purposes of this notification the expression "not manufactured locally" shallmean the goods which are not included in the list of locally manufactured goods, specified in the GeneralOrder, issued by the Central Board of Revenue.

TABLE

S. No. List of industries(1) (2)

1. Arms and ammunition.2. Security printing, currency and mint.3. High explosive.4. Radioactive substances.5. Alcohol, except industrial alcohol.6. Cotton ginni ng.7. Spinning, except as part of integrated textile unit.8. Sugar (white ) manufacturing.9. Flour milling.10. Steel Re-rolling and furnace.11. Tobacco industry.12. Ghee or vegetable oil industry.13. Plastic bags including polypropylene and polyethylene.14. Beverage excluding fruit juices.15. Polyester industry.16. Automobile assembly.17. Cement industry.

FORM - I

( CONSUMPTION CERTIFICATE )

Certificate No.. . . . . . . . . . . . . . . . date . . . . . . . . . . . . . .

It is certified that the raw materials imported by________________________ under Notification

No.S.R.O. ___________, dated______ and released vide bill of entry No. __________, dated _______, have

been used for the manufacture of _______________in accordance with the scale laid down by the Chief,

Survey and Rebate, as certified by him under condition (iii) of the said Notification.

Assistant Collector Name and official stamp

FORM - II

Register of sale of goods, equipment and machinery manufactured from raw materials imported under

Notification No. S.R.O. _________ dated _______________.

23

S. No. Name and address of buyer Date of sale Goods sold Quantity No. anddate of theConsumptioncertificate

(1) (2) (3) (4) (5) (6)

Explanation.- For the purposes of this Notification, the expression "set up" shall mean the date on which the industrialunit commences its commercial production, which date shall be intimated in writing, by the manufacturer to the AssistantCollector of Sales Tax having jurisdiction in the area at least fifteen days before commencing such production but shall notinclude the date of expansion, balancing, modernization or replacement of such industry.

( On appropriately stamped non-judicial paper )

INDEMNITY BOND

THIS DEED OF INDEMNITY IS MADE ON THE __________day of__________________BETWEENMessers_________________ having registered office at ______________(hereinafter called "the importer" whichexpression includes his successors, administrators, executors and assignees) of the one part, AND the President ofPakistan through the Collector of Customs______________(hereinafter called "the Collector of Customs" of the otherpart);

WHEREAS the Federal Government has, vide Notification No. S.R.O.___________, datedthe________________, and subject to the conditions given in the Notification, been pleased to direct that such rawmaterials/plant and machinery as is not manufactured locally, shall be exempted from twenty-five percent/whole of thecustoms duty chargeable and sales tax leviable thereon, if imported for the setting up industries in Special Industrial Zonesin accordance with the said Notification;

AND WHEREAS M/s_________________ having registered office at __________________(hereinaftercalled the "importer") have imported the plant and machinery mentioned in the Schedule to this Bond for the purpose ofsetting up industries in accordance with the conditions given in the said Notification:

NOW, THEREFORE, in consideration of the release of the raw materials/machinery/without recovery ofcustoms duty and sales tax, the importers bind themselves to pay on demand to the Government of Pakistan a sum ofRs.______________ being the customs-duty and sales tax leviable on the raw materials/machinery if the importers fail -

(i) to produce a certificate from the Project Director, Special Industrial Zone and the AssistantCollector, Customs and Central Excise, within one year from the date of the importation of theraw materials/plant and machinery, to the effect that the raw material has been used/plant andmachinery have been installed at a place in any of the Special Industrial Zone; or

(ii) to produce such evidence as it may be necessary to establish that the raw materials have beenused/plant or machinery have been installed in accordance with the conditions of the saidNotification.

The importer further agrees and binds himself that the amount covered by this Bond may be recovered asarrears of customs duty under section 202 of the Customs Act, 1969.

The importer shall stand discharged from any liability under the Bond when the aforesaid certificate has beenproduced and it is established through other evidence, if necessary, that the importer has fulfilled all the conditions of thisBond.

Signed by importers on this___________________ day of________________________19

___________________( Managing Director )

(Name and permanent address)Witness __________________________________________

(Signature, name, designation and full address)

Witness _________________________________________(Signature, name, designation and full address)

Note: The bond shall be witnessed by a Government servant in BPS 16 or above.

{C.No.1/9/Mach/92-9-95}

24

RIAZ HUSAIN NAQVIAdditional Secretary

As amendedS.R.O.84(I)/96, - dated 30.01.1996S.R.O.703(I)/99, - dated 12.06.1999

GOVERNMENT OF PAKISTANMINISTRY 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 hadexecuted 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 pleasedto exempt the mining companies specified in the Appendix-

(a) from payment of customs-duty in excess of 5 per cent ad valorem leviable under theFirst Schedule to the Customs Act,1969, and whole of the sales tax leviable under theSales Tax Act,1990, on import of machinery, equipment, spares and chemicals as

are not manufactured locally and specified in the Table below, till thecommencement of commercial production; and

(b) from payment of customs-duty in excess of 10 per cent leviable under the First Scheduleto 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 manufacturedlocally and specified in the table below, after commercial production of such miningcompanies, subject to the following conditions, namely:-

(i) the benefit of this Notification shall be available to foreign miningcompanies which have entered into agreement with Government of Pakistanor public sector corporations before the 21st December,1995;

(ii) the importer shall; at the time of import of plant and machinery, make awritten declaration on the bill of entry to the effect that the machinery andequipment has been imported for mining project and for the purposespecified in the bill of entry;

(iii) the importer shall furnish an indemnity bond in the Form set out below to theextent of customs-duty and sales tax exempted under this Notification andthe said bond shall not be discharged till production of installation certificatewhich shall be produced within one year from the date of importation ofmachinery and equipment from Assistant Collector, Customs and CentralExcise, in whose jurisdiction the project is located and such certificate ofverification would clearly state that the machinery and equipment importedfor 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 theCollector of Customs shall enforce the indemnity bond and proceed torecover the Government dues under section 202 of the Customs Act,1969,and the rules made thereunder.

25

Explanation.- For the purposes of this notification the expression "not manufactured locally" shallmean the goods which are not included in the list of locally manufactured goods, specified in the GeneralOrder, 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. 782. BHP Minerals International Exploration Inc. 1093. 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 suchmachinery and equipment as is not manufactured locally, shall be exempt from so much of the customs-duty asis in excess of 5 per cent or, as the case may be, 10 per cent of such duty and whole of the sales tax leviablethereon, if imported in accordance with the said Notification;

AND WHEREAS M/s.___________ have imported the machinery and equipment mentioned in theSchedule to this bond for the purpose of setting up units in accordance with the conditions specified in the saidNotification;

NOW, THEREFORE, in consideration of the release of the machinery and equipment withoutrecovery of customs-duty in excess of 5 per cent or, as the case may be, 10 per cent of such duty and whole ofsales tax leviable the importers bind themselves to pay on demand to the Federal Government the sum ofRs.________being the customs duty and sales tax leviable on the machinery and equipment, if the importersfail-

(a) to produce installation certificate from the Assistant Collector of Customs and CentralExcise, within one year from date of its import; and

(b) to produce such other evidence as the Collector of Customs may require to satisfyhimself that the machinery and equipment has been installed in accordance with theconditions of the said Notification.

26

The importers further agree and bind themselves that the amount covered by this bond may berecovered as arrears of customs-duty under section 202 of the Customs Act,1969 (IV of 1969), and the rulemade thereunder.

This bond shall become void when the aforesaid certificate has been produced and the Collector ofCustoms is satisfied that the importers have fulfilled all the conditions of this bond and the aforesaidNotification.

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 ascheduled bank.

SCHEDULE OF MACHINERY AND EQUIPMENT IMPORTED.

( KHALID AKBAR )Deputy Secretary

(C.No.1(61)Mach./76.Pt.)

As amended

S.R.O.715(I)/99, - dated12.06.1999


NOTIFICATION

Islamabad, the 13th June, 1997

CUSTOMS

S.R.O. 431 (I)/97.- In exercise of the powers conferred by section 19 of the Customs Act, 1969(IV of 1969), the Federal Government is pleased to exempt components,, sub-assemblies and assemblies andother items of machinery, as are not manufactured locally, if imported by a local manufacturer for themanufacture and supply of complete units or plants from levy of the whole of customs-duties leviable underthe First Schedule to the Customs Act, 1969 provided the rates applicable to equipment and machinery whenimported as part of a complete industrial plant (as listed below) by contractors/project sponsors, etc is 10% orless. Where such duty is higher than 10% then the exemption in custom-duty shall be limited to a maximum of10%. The concession in duty shall be subject to the following conditions, namely:-

(i) The manufacturer is recognized prime manufacturer cum supplier of such plants, andhas suitable in house facilities for design, engineering and progressive manufacture ofsuch units or plants in respect of which he claims exemption under this notification;

27

(ii) the items of machinery allowed for concessionary import under this notification shall bein accordance with the Industry Specific deletion programme (wherever applicable)chalked out, in accordance with the laid down procedure, for such industrial plantsspreading over a maximum period of five years. The local manufacturer shall berequired to achieve the minimum level of deletion of the related industrial plant and thecontinued availability of the exemption under this notification shall be contingent upon-

(a) the achievement of progressive annual deletion as approved by theEngineering Development Board; and

(b) the use of locally manufactured deleted items.

(iii) the manufacturer has suitable in-house facilities for manufacture of goods in respect ofwhich he claims exemption under this notification;

(iv) the manufacturer shall furnish to Chief (Survey), Central Board of Revenue, or anyofficer authorized in this behalf, in the prescribed form, the list of goods that he ismanufacturing or intends to manufacture alongwith the details of raw materials, sub-components and components required and the Chief (Survey), Central Board ofRevenue, or such authorized officer, in consultation with the Collector of Customs or, asthe case may be, Collector of Central Excise or Collector of Central Excise and SalesTax, will certify the annual capacity of the unit for the manufacture of such goods andtotal requirements of various types of raw materials alongwith the quantity required forthe manufacture of each specified item;

(v) the manufacture shall, at the time of import of raw materials and components make awritten declaration on the bill of entry to the effect that the inputs have been imported inaccordance with his entitlement in terms of condition (I) above. The manufacturer shallalso declare that the imported raw material and components etc shall be consumed forthe purpose of manufacture/assembly of the permissible products within a period of oneyear;

(vi) the manufacture shall communicate to the concerned Collector of Customs in writingabout the consumption of imported raw materials and components within fifteen days ofconsumption of goods. In case of non-consumption within one year, the importer shallpay the duty and taxes involved or shall give plausible reasons to the Collector ofCustoms in an application to get extension for a reasonable period not exceeding sixmonths; and

(vii) in case the manufacturer does not provide information regarding consumption orotherwise of the imported raw materials within the prescribed period of one year, or ifotherwise deemed necessary, the Duty Suspension Audit Organization (DSAO)constituted by the Central Board of Revenue shall carry out audit of the manufacturingunit. If the audit team is not satisfied regarding the consumption of raw materials, theyshall report their finding to the concerned Collector of Customs who shall initiateproceedings for the recovery of leviable duty and penal action under the relevantprovisions of the law; and

(viii) Omitted.

(ix) the manufacturer shall maintain a record of complete industrial plants with break-up ofthe sale of the manufactured goods and the imported goods in the form set out belowand shall produce, on demand, such record and other evidence of sales as may berequired for inspection by an officer of Customs not below the rank of AssistantCollector of Customs in whose jurisdiction the manufacturing unit is located or anyother officer authorized by the Central Board of Revenue in this behalf; and

(x) the vendors, if directly linked with the prime manufacturer cum supplier, shall also beentitled to avail exemption of custom-duties under this notification subject to fulfilling

28

all the above requirements to the satisfaction of Central Board of Revenue andEngineering Development Board.

Explanation.- For the purposes of this notification the expression "not manufactured locally" shallmean the goods which are not included in the list of locally manufactured goods, specified in theGeneral Order, issued by the Central Board of Revenue.

TABLE

S.No. Description of industrial plants or units.

1. Sugar mill upto 10,000 tcd capacity per unit2. Cement plant upto 4000 tpd capacity per unit3. Certain types of chemical plants for the production of industrial chemicals4. Thermal power plant upto 350 MW capacity per unit5. Hydel Power Plant upto 50 MW capacity per unit6. Certain types of oil and gas development plant6A. Textile machinery; and7. Any other project approved by the Indigenization Committee of Engineering

Development Board(EDB).

(C.No.6(9)-CB/97)(RIAZ AHMAD MALIK)

Additional SecretaryAs amendedS.R.O.720(I)/99, - dated 12.06.1999S.R.O.441(I)/2001, - dated 18.06.2001

S.R.O.356(I0/2002 - dated 15.06.2002


Islamabad, the 21st January,1998.

NOTIFICATION(CUSTOMS )

S.R.O.38(I)/98.- In exercise of the powers conferred by section 19 of the Customs Act,1969(IV of1969), and clause (a) of sub-section (2) of section 13 of the Sales Tax Act, 1990, the Federal Government ispleased to exempt Compressed Natural Gas (CNG) machinery, equipment, conversion kits and cylinders, asspecified in Table I,II,III,IV and V excluding those manufactured locally, from payment of whole of thecustoms-duty leviable under the First Schedule to the Customs Act, 1969 (IV of 1969), and sales tax, ifimported by CNG companies or the local automotive manufacturers and assemblers having valid CNG licenceduring the period commencing from the 1st November,1997 to 31st October,2002, subject to the followingconditions, namely:-

(1) Omitted;

(2) the importers availing benefits under this notification shall furnish to the Collector ofCustoms an indemnity bond in the form set out below to the extent of customs-dutiesand sales tax exempted under this notification to the Collector of Customs for machineryand equipment only. The indemnity bond shall be valid for a period of one year for theamount of customs duties and sales tax exempted under this notification;

(3) the indemnity bond shall be discharged on production of a certificate issued by theAssistant Collector of Customs and Central Excise in whose jurisdiction the CNGstation or local automotive manufacturers and assemblers units is located to the effectthat items imported under this notification have been duly installed;

29

(4) in the event of non-production of a certificate as required under sub-para (2) above, theCollector of Customs shall enforce the indemnity bond and proceed to recoverGovernment dues under section 202 of the Customs Act,1969(IV of 1969), and section48 of the Sales Tax Act,1990 and the rules made thereunder.; and

(5) The importers availing benefits under this notification shall obtain quality certificate ofthe original manufacture, witnessed by the designated third party inspectors mentionedagainst each equipment as specified in Table-I, Table II, Table III and Table IVrespectively that the equipments meet the safety standards as laid down in PakistanCNG Rules 1992.

Explanation.- For the purposes of this notification the expression "excluding those manufacturedlocally" shall mean the goods which are included in the list of locally manufactured goods, specified in theGeneral Order, issued by the Central Board of Revenue.

Table-I

30

Sr.No Brand Name of Compressor ModelsDesignated3rd partyInspectors

1. Norwalk Company Inc., USA C-75-3, C150-4, NQSV3 Lloyd’s, QualityTech LLC, ABS,Bureau Veritas

2. RIX Services Ltd, New Zealand. 2JJS3G-178, FX-150, 3KX3G-40,6W5G-150

Lloyd’s, SGS,ABS, BureauVeritas

3 Compare UK Ltd., UK. Gazpack 36, Gazpack 37 (5436 MKII) -Do-

4 Prescon Technology, NewZealand

PTL4V4/730, 3W-315-100(P.T.3D3-15-90-A) 3W-315-90 (P.T.3D3- 8-90-A)

-Do-

5 Sulzer Burckhardt Engg. Works,Switzerland.

C4U111S, C5U214S -Do-

6 Ham worthy, Belliss & MorcomUK.

H430H-WL, H280H-WL, V130H-WL

-Do-

7 Jordair Compressors Inc.,Canada

H-302, M 302 -Do-

8 Safe s.r.l, Italy. SW75SE-F1-EM, SW110SE-F1-EMSW110-F1-EM, SW132-F1-EM,SW90F0, 35-EM

Lloyd’s, SGS,ABS, BureauVeritas

9 Hurricane, Grimmer Industries,USA

CNG90, CNG125, CNG250 Lloyd’s,Quality TechLLC, ABS,Bureau Veritas

10 Paget s.r.l ,Italy EL 75,EL110, EL132 Lloyd’s, SGS, ABS,Bureau Veritas

11 Chengdu Jinxing ChemicalMachinery and EquipmentFactory, China

ZW-3.45/250JX, ZW-5.0/1-25ZW-5.52/0.56-250JX

-Do-

12 Chongqing Air Gas CompressorChina

L-3.8/1-250, L-3/1.250 L-5/0.56-250,L-2.9/0.56-250 and L-4.65/0.56-250

-Do-

31

13 Sumygazmas, Ukraine AGKNS M-45 AGKNS 60, AGKNS75

-Do-

14 Sulzer India. C5U214.IGP -Do-15 Intermech Ltd, New Zealand RHINO PAR-75VE 4-8.

RHINO PAR-100DE 4-82RHINO PAR-150DE4-10

-Do-

16 Unigas New Zealand. Apollo VR-550 -Do-17 Bauer Compressors, Germany. C25.0-37, C25.0-45, C28.0-75,

C28.0-90-Do-

18 Ariel USA (Packager CNGGalileo S.A Argentina as modelMicro skid & Micro box.)

JGM, JGN, JGQ Lloyd’s, QualityTech LLC, ABS,Bureau Veritas

19 Compare Mahle GmbH,Germany.

5409.2.NG.EU Lloyd’s, SGS, ABS,Bureau Veritas

20 Sicom SRL, Italy. 650.250.20-IFDE-23SE. -Do-

Table-IISr.No Brand Name of Mass Flow

CNG dispenser. ModelsDesignated3rd partyInspectors

1 Safe s.r.l, Italy. ESP-22/2, ESP-22/3 Lloyd’s, SGS, ABS,Bureau Veritas

2 Prescon Technology New Zealand DF 200 3PTP, CF 200 3PTP AF 2003PTP.

-Do-

3 Bray China, (Mass flow meter,Dan Foss, Denmark.).

BT-20. -Do-

4 Chongqing Air Gas Compressormachinery & equipment China

JQJ-DH-II. -Do-

5 Ham worthy, Belliss & MorcomUK

TGT 7000 series Model D-25. -Do-

6 Chengdu Jinxing ChemicalMachinery and EquipmentFactory, China

HJQJ. -Do-

7. RIX, New Zealand 4R-20 -Do-8 Jordair Compressors Inc. Canada GFP-2-3600-TC, -Do-9. ANGI International LLC USA BH 38 Lloyd’s, Quality Tech LLC,

ABS, Bureau Veritas10 Intermech Ltd, New Zealand DIP-20D2, DIC Series. Lloyd’s, SGS, ABS,

Bureau Veritas11 CNG Galileo SA Argentina EM-98/S.

EM-98/B.

-Do-

12 Beijing Chang Kong Machineryco. Ltd China

JYQ-W20. -Do-

13 Paget s.r.l Italy PWT/ 22. -Do-14 Fueling Technologies Inc.FTI

CanadaCNG-5260 -Do-

15 Natural Energy Resources LtdNew Zealand

3-BEDD HS Code 8479 -Do-

32

16 Sicom SRL Italy. DPG -Do-17 Compac New Zealand LE-3-KG-25, LE-3-KG-25 D. -Do-

Table-III

Sr.No. Brand Name of storagecylinders

Qualifying standards Designated 3rd PartyInspector

1.

2.3.

4.5.

6.7.8.9.

10.

11.

12.

13.

14.

15.

UEF Chesterfield U.K

CTCO UK.Mesco.

Dual Fuel Systems.Worthington Heiser,Austria.Dalmine spa, Italy.K.B, Japan.YM, China.Taylor-Wharton GasEquipment Division, USA.Thailand Institute of S & TResearch, Thailand.Nippon High Pressure Co.,Japan.Beijing Tianhai IndustrialCo., China.Chengdu Jinxing Chemicalmachinery andEquipment Factory, China.Everest Kanto Cylinder(EKC) India.Inflex Argentina SA

BS 5045-P-I (EN: 1964-I.1999), ISO 9809-1-1999

ORD.O.T 3AA USA

Lloyd’s, ABS, Bureau,SGS, BIE

-Do-

Lloyd’s, ABS, SGSBureau Veritas.

-Do--Do--Do--Do--Do--Do-

-Do-

-Do-

-Do-

-Do-

-Do-

-Do-

Table-IVSr.No.

Brand Name of CNG vehicleCylinders

Qualifying standard DESIGNATED 3rd

PARTY INSPECTORS.

1.

2.3.

4.5.6.

Faber Industries, Italy

Worthington Heiser, AustriaEverest Kanto Cylinder (EKC)Ltd., lndiaInflex, ArgentinaDalmine spa, ItalyBeijing Tianhai Industrial Co.,China

NZS 5454 Lloyd’s, ABS, BureauVeritas, SGS

-Do--Do-

-Do--Do--Do-

33

Table-V

S.No. List of CNG vehicle conversion kits.

1. Landi Renzo, Italy.2. Impco USA.3. Tartarini, Italy.4. Landi Auto Gas Itlay.5. Emme Gas Italy.6. Lovato, Italy.7. Blue Runner Italy.8. Sprint Gas kit, Australia.9. Bi-Gas, Italy.10. Stefanelli, Italy.11. Bedini, Italy.12. BRC Italy.13. Zoni Model No.XVVIII, China.14. Salustri Argentina, Model No.GS 2000,GS 93.15. Lo GasSRL Italy.

( on appropriately stamped non-judicial paper )INDEMNITY BOND

THIS DEED OF INDEMNITY is made on the _______ day of _________ BETWEEN Messers___________ having registered office at __________(hereinafter called "the importer" which means andincludes their successors, administrators, executors and assignees), of the one part, AND the President ofPakistan through the Collector of Customs, (hereinafter called " the Collector of Customs"), of the other part.

WHEREAS the Government of Pakistan has, by its decision contained in NotificationS.R.O.______dated the _________and subject to the conditions given in the said notification, been pleased todirect that the CNG machinery and equipment only, excluding those manufactured locally, shall be exemptfrom whole of the customs duties and sales tax, leviable thereon, if imported by the CNG Companies or thelocal automotive manufacturers or assemblers under the said notification.

AND WHEREAS M/s. _______________ having registered office at _____________ haveimported the items mentioned in the Schedule (please specify in the Schedule, description, quantity and valueof the items imported) to this Bond for the purpose of (please specify the particulars of the project and phase ofthe project)

NOW, THEREFORE, in consideration of the release of the goods without payment of customsduties and sales tax importers bind themselves to pay on demand to the Collector of Customs the sum of Rs._____ being the customs duties and sales tax leviable on the goods, if the importers fail-

(i) to produce a certificate of verification from the concerned Assistant Collector ofCustoms and Central Excise within one year from the date of the importation of thegoods to the effect that the same has been installed in accordance with the saidNotification;.

(ii) to produce such other evidence as it may be necessary to establish that the goods havebeen 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 berecovered as arrears of Customs duties and sales tax under section 202 of the Customs Act, 1969(IV of 1969)read with section 48 of the Sales Tax Act,1990(VII of 1990) and the rules made thereunder.

This Bond shall be rendered void when the aforesaid certificate has been produced and theCollector of Customs is satisfied that the importers have fulfilled all the conditions of this Bond and theaforesaid notification.

34

Signed by importers on this _______________________________ day of __________________19.

(Authorised 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)

[F.No.3(9)Mach/97]( NASEER AHMAD )

Additional SecretaryAs amendedS.R.O.728(I)/99, - dated12.06.1999S.R.O.440(I)/2001, - dated 18.06.2001S.R.O.219(I)/2002, - dated 10.04.2002S.R.O.373(I)/2002 - dated 15.06.2002.

GOVERNMENT OF PAKISTAN

MINISTRY OF FINANCE AND ECONOMIC AFFAIRS

NOTIFICATION

Islamabad, the 12th June,1998.

(CUSTOMS)

S.R.O.554(I)/98.- In exercise of the powers conferred by section 19 of the Customs Act,1969(IVof 1969), and clause (a) of sub-section (2) of section 13 of the Sales Tax Act,1990, and in supersession of itsNotification No.S.R.O.424(I)/97, dated the 13th June,1997, the Federal Government is pleased to exempt suchmachinery or spares thereof from the customs-duties leviable under the First Schedule to the Customs Act,1969 (IV of 1969), and sales tax chargeable thereon under the said Act., as are not manufactured locally,imported for setting up a manufacturing unit or for the expansion, balancing, modernization and replacementof existing units in bond subject to the following conditions, namely:-

(i) The importer shall at the time of importation, by documents in his possession, satisfy theCollector of Customs that the machinery or spares have been imported for setting up amanufacturing unit in bond and shall furnish an indemnity bond in the form set outbelow to the extent of customs duty and sales tax exempted under this notification. Thesaid indemnity bond shall be discharged on production of a certificate from theAssistant Collector, Customs and Central Excise, or in the case of a unit located in AzadJammu and Kashmir or Northern Areas, from the Secretary, Kashmir Affairs andNorthern Affairs Division or an officer authorized by him in this behalf to the effect thatthe machinery or spares as declared to the customs has been duly installed or used in thebonded premises and such other evidences as the Collector of Customs may require andafter such inquiry as he deems fit in order to establish such installation. Officers ofCustoms having jurisdiction shall monitor the production and sales of output of themanufacturing unit in the local market and abroad and shall ensure that the conditions ofthe notification are duly complied with;

(ii) the importer shall, at the time of importation of the machinery, furnish an undertaking tothe Collector of Customs to abide by the conditions laid down in this notification failing

35

which he shall pay the amount of customs-duty and sales tax due and make payment ofany penalties that may be imposed in this behalf;

(iii) the certificate of installation referred to in condition (i) shall be submitted to theCollector of Customs alongwith certificate from concerned Collectorate regardingrealization of customs-duty and sales tax as a result of default as per condition(v) of thisnotification not later than one year from the date of filing of bill of entry for homeconsumption relating to such machinery or spares;

(iv) the machinery or spares released under this notification shall not within a period of fiveyears from the date of filing of bill of entry for home consumption relating thereto beused for any purpose or at any place other than for a manufacturing unit in bond. Incase, this condition is violated the amount of customs-duty and sales tax exempted underthis notification and such penalties as may be imposed in this behalf, shall be recoveredunder section 202 of the Customs Act,1969(IV of 1969); and

(v) (a) export targets specified in the Table shall have to be achieved by industrial ormanufacturing unit from the date of installation of the machinery or equipment andupto a period of five years, namely:-

TABLE

Type of Unit Period Export Target (1) (2) (3)

A. Leather footwear and engineering goods. First three years 20% of the value oftheir actualproduction.

After three years 50% of the value of

their actual production.

B. Expansion of existing units. First three years 50% of additionalcapacity due to expansion.

After three years 60% of additionalapacity due to expansion.

C. Others First two years 50% of the value ofactualproduction.

After two years 60% of the value ofactual production.

D. Imports effected under Notification No. First tow years 50% of the value ofS.R.O.962(I)/90, dated the 12th September, actual production.1990, and Notification S.R.O.No.424(I)/97dated the 13 th June,1997.

After succeeding three 60% of the value ofyears. actual production.

36

(b) An industrial unit which fails to achieve export targets specified above to thesatisfaction of Collector of Customs. shall pay the whole of customs-dutyand sales tax leviable at the time of importation of such machinery.

Explanation.- For the purpose of this Notification,-

(i) Production year shall be deemed to start from the date on which the industrial unit startscommercial production;

(ii) the expression "existing units" shall mean those units which are or have been set upon orbefore the date of issue of this notification; and

(iii) For the purposes of this notification the expression "not manufactured locally" shallmean the goods which are not included in the list of locally manufactured goods in theGeneral Order, issued by the Central Board of Revenue.

FORM

[ See condition (i) ]


THIS DEED OF INDEMNITY is made on the _________ date of __________BETWEENMessrs___________ having registered office at _________(hereinafter called "the importers" which meansand includes their successors, administrators, executors and assignees) of the one part, AND the President ofPakistan through the Collector of Customs _________ (hereinafter called the "Collector of Customs", of theother part.

WHEREAS the Federal Government, by its decision contained in Notification No. S.R.O._____-dated the ______ and subject to the conditions given in the said Notification, has been pleased to direct thatsuch machinery or spares, as are not manufactured locally, shall be exempt from the whole of customs-dutyand sales tax leviable thereon, if imported for setting up of a manufacturing unit, or for the expansion,balancing, modernization and replacement of existing units in accordance with the said notification.

AND WHEREAS M/S.____________ having registered office at __________ (hereinafter calledthe importers) have imported the machinery mentioned in the Schedule to this Bond for purposes ofestablishing a manufacturing unit in accordance with the conditions given in the said Notification;

NOW, THEREFOR, in consideration of the release of the machinery without recovery of leviableduty and taxes, the importers bind themselves to pay on demand to the Government of Pakistan the sum of Rs.__________ being the duty and taxes leviable on the machinery, if the importers fail -

(i) to produce a certificate from Assistant Collector of Customs and Central Excise,Secretary, Kashmir Affairs Division or an officer authorized by him in this behalf, as thecase may be, within one year from the date of the importation of the machinery, to theeffect that the machinery has been installed in bond; and

(ii) to produce such other evidence as the Collector of Customs may require to satisfyhimself that the plant or machinery has been installed in accordance with the conditionsof the said Notification.

The importers further agree and bind themselves that the amount covered by this Bond shall berecovered as arrearsof customs duty under section 202 of the Customs Act,1969 .

This Bond shall become void when the aforesaid certificate has been produced and the Collector ofCustoms is satisfied that the importers have fulfilled all the conditions of this Bond in the said Notification.

37

Signed by importers on this ____________________ day of ___________________199______.

Managing Director(Name and permanent address)

Collector of Customs(On behalf of 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 aGovernment servant in BPS 16 or above, an Oath Commissioner, a Notary Public or an officer of aScheduled Bank.

SCHEDULE OF MACHINERY

[C.No.6(25)/97-CB]( KHALIL MASOOD )

Additional SecretaryAs amendedS.R.O.732(I)/99, - dated 12.06.1999S.R.O.354(I)/2002 - dated 15.06.2002

GOVERNMENT OF PAKISTAN

MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS & REVENUE

(REVENUE DIVISION)***

NOTIFICATION

Islamabad, the 23rd October, 2000

CUSTOMS

S.R.O. 767(I)/2000.- In exercise of the powers conferred by section 19 of the Customs Act, 1969(IV of 1969), and clause (a) of sub-section (2) of section 13 of the Sales Tax Act, 1990, the FederalGovernment is pleased to direct that plant, machinery, equipment and materials, as specified in the tablebelow, for the construction of New Passenger Terminal Complex and related facilities at Lahore InternationalAirport, shall be exempt from so much of the customs-duty as is in excess of ten per cent ad valorem and thewhole of sales tax if imported up till completion of the project by Civil Aviation Authority (CAA) of byConsortium of Airsys ATM Ltd Joannon and Paraskevaids (Overseas) Ltd., who are the contractors,hereinafter referred to as the specified contractors of the project subject to the following conditions, namely:-

(1) the importer or specified contractor shall, at the time of import of items makes a writtendeclaration on the bill of entry that the plant, machinery, equipment and materials hasbeen imported in accordance with this notification;

38

(2) the importer or specified contractor shall furnish an indemnity bond in the form set outbelow to the extent of customs-duty and sales tax exempted under this notification andthe said bond shall not be discharged till production of an installation certificate, withinone year from the date of importation of plant, machinery, equipment and materials,from the Assistant Collector or Deputy Collector of Customs, Lahore InternationalAirport, Lahore, in whose jurisdiction the project is located and such certificate shallclearly state that the plant, machinery, equipment and materials imported in accordancewith this notification have been duly installed;

(3) in the event of non-production of such certificate by the importer or specified contractor,on contravention of any provision of this notification the Collector of Customs shallenforce the indemnity bond and proceed to recover Government dues under section 202of the Customs Act, 1969 (IV of 1969), and the rules made thereunder besides takingany other punitive action under the law; and

(4) the specified contractor shall produce a certificate from Civil Aviation Authority that theplant, machinery, equipment and material, is required for the construction of the NewPassenger Terminal Complex and related facilities at Lahore International Airport.

TABLE

-----------------------------------------------------------------------------------------------------------------------------------Sr. No. Description------------------------------------------------------------------------------------------------------------------------------------(1) (2)------------------------------------------------------------------------------------------------------------------------------------

A. Electrical

1. General Electrical Equipment/system comprising.

i. Switchboard components viz. Circuit breakers, load break switches, protective relays,fuses, transducers, meters, contractors etc. of high tension and low tension switchboardsand control boards.

ii. Light fixtures with ballasts, starters, capacitors, ignitors and lamps, track high system,Out-door (apron, taxiway and car park) for Airports.

iii. Battery chargers and associated batteries.iv. Flashing light units for aircraft guidance.v. Single phase and three phase circuit tracks for light fixtures and receptacles.vi. Under floor cable ducts with apparatus insert boxes.vii. Wall trunking system.viii. Pipe soil reference measuring device for cathodic protection system.ix. Traffic signals system equipments.

2. 400 Hz Aircraft Supply System.

i. 400 Hz, generating plant with frequency converter.ii. 960 volts/400 Hz switchgear.iii. Control cabinets for 400 Hz system.iv. 400 Hz regulating transformers.v. Cables reeling drums for 400 Hz cables with control system.vi. Cable trailing system.

39

vii. Computer controlled power logging system.viii. Spare parts, special tools, etc.

3. Airfield and Apron Lighting System Comprising.

i. High lighting columns (collapsible) for apron flood lighting.ii. Special flood light units.iii. Apron and Taxiway lights and clearance bar with lamps, reflectors, lens filters.iv. Stop bars, complete with indication loops.v. Airfield Mandatory/Guidance signs including components.vi. Isolating transformers complete with primary and secondary leads and plugs/receptacles

for airfield lighting.vii. Secondary plugs and receptacles.viii. Constant current regulators (CCRs) including circuit breakers, lamp and insulation

failure modules.ix. Control and monitoring desk for airfield cables.x. Tools and spare parts.xi. Aircraft guidance for Nose in Stands system.xii. Aircraft guidance for Nose in stands system. Pipe soil reference measuring cathodic

point for cathodic protection system.

B. Telecommunication System.

1. Radio Paging System Consisting of

i. Receive only pagers.ii. Charging racks.iii. Pagers with talk back facility.iv. Pagers with dialing facility.v. System accessories.

2. Public Address System Consisting of

i. Ceiling speaker.ii. Column speakers.iii. Amplifier.iv. Cable accessories.

3. Fire Detection System Consisting of

i. Fire alarm control panel including mimic panel.ii. Fire alarm cable.iii. Ionization smoke detector.iv. Heat detector.v. Manual call points.vi. Optical smoke detectors.vii. Alarm devices.viii. Up flame detectors.ix. Explosion proof manual station.x. Light shaft fire detection system.

4. Flight Information Display System Consisting of

i. Control computer including all accessories.ii. Operating console having 19” higher solution monitor with keypad.iii. Cables for interconnection of sub-system.iv. Split flab boards.v. Colour monitor.

40

vi. Monochrome monitor.vii. Data distributor controller.viii. Video display controller.ix. Large character video display controller. Status switch controller.

5. CCTV System Consisting of

i. Fixed camera.ii. Camera with pan/tilt head.iii. Weather proof enclosure for cameras.iv. Remote control system for cameras.v. Monitor console.vi. Video transmission and distribution system including receiver amplifier, digital video

matrix and co-axial cable.

6. Security Detection System Consisting of

i. Hand baggage, X-ray detection system.ii. Hold baggage, X-ray detection system.iii. Metal detector walk through gates.

7. Master Clock System Consisting of

i. Master clock.ii. Slave clicks.

C. Mechanical & Fuel Systems.

1. Hydraulic Elevators with all accessories.2. Rope Traction elevators with all accessories.3. Escalators with all accessories.4. Apron drive bridge Consisting of

i. Rotunda ends.ii. Telescoping tubes.iii. Aircraft end cabs.iv. Support columns.v. Drive equipment.vi. Curtains canopy and spares.

5. Baggage handling equipment Consisting of

i. Electronic luggage scales.ii. FIDS for counter heads.iii. Control panels, mimic boards and control equipment.

6. Equipment for fuel hydrant system Consisting of

i. Steel pipe (dia 24”).ii. Valves, flanges and pipe fittings including bolts, link seals spiral seals, (with fire proof

seals).iii. Hydrant valve including covers.iv. Fuel hydrant valves.v. Hydraulic steel cover with operating equipment.

D. HVAC System

1. Centrifugal Chillers

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2. Variable Air-Volume Boxes Comprising of

i. Actuators.ii. Dampers.iii. Thermostat.iv. Sound Attenuator.

3. Printed Steel Pipe work, sch. 40 (Seamless) Includes.

i. Piping Supports and channels.ii. Roller supports.iii. Pipe Fittings (elbows, trees, bends, etc.).iv. Fixing accessories.

4. Material for Duct work

i. Rawl bolts.ii. Flexible connectors.iii. Special flanges and channels for joining ducts.iv. Turning vanes.v. Duct sealers.

5. Thermal Insulation for Duct Works, Adhesive, Tape.

6. Thermal Insulation for Pipe Works, Adhesive, Tape.

7. Thermal Insulation for Pumps.

8. Electrical Panels (MCC’s/ACP’s & ECI’s) Including.

i. Relays.ii. Switches.iii. Starters.iv. Breakers.v. Instruments (Ammeters, Voltmeters, etc.)

9. Building Management and Control System Comprising of

i. Personal computer.ii. Printer.iii. Controllers.iv. Sensors.v. Actuators/Motors.vi. Pressure switches.vii. Fire stats, smoke detectors.viii. Shielded cables.ix. Flow meter.x. Transformers.xi. Control valves.xii. Controllers.

10. Valves (above 16 bar pressure).11. Strainers.12. Motorized control valves.13. Pipe Thermometers with Thermometer Well.14. Pressure Gauges with Gauge Cock.15. Flow meter.

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16. Air Separators.17. Duct Thermometers with Mounting Flange.18. Grilles, Diffusers etc.19. Flexible/Round Duct with Clamps.20. Acoustic Lining in duct.21. Spare Parts for above items.

E. Civil Architectural materials.

1. Reflectorised glass beads.2. Reflective pavement marker.3. Admixtures.4. Heavy duty steel manhole covers.5. Ductile iron pipes and fittings.6. Cast iron gate valves.7. Elastomeric water proofing membrane.8. Curing compound.9. Building expansion joint assembly.10. Mastic sealant.11. Bridge expansion joints.12. Neoprene bearing pads.13. Glass fiber roof insulation.14. Fire rated steel doors.15. Hermetically/sealed glazed aluminum windows/curtain wall.16. Aluminum ceilings/steel for fire rated locations.17. Granite.18. Lock sets-Master key.19. Laminated tampered tinted glass.20. Liquid water proofing membrane.21. Mineral fiber ceiling boards.22. Specialized paints vanishes for apron marking.23. Rigid fiberglass insulation.24. Joint filter.25. Joint sealant.26. Epoxy Grout.27. Non illuminated signs for air fields.28. Dry wall systems.29. Mirrors.30. S.S. Anchors & Fasteners.31. S.S. cavity tiles.32. Fire proof earpets.33. Gypsum plaster board.34. Tiles adhesives.

F. Grid Station

1. 132 KV gas insulated switchgear (GIS).2. Current transformers.3. Voltage transformers.4. 76/13 Kv XLPE cable and its terminations.5. Station DC equipment.

G. Services.

1. Water works fire fighting and landscaping

i. Wedge gate valves.ii. Double acting air valves.

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iii. Over ground fire hydrant underground fire hydrant.iv. Check valves.v. Multistage centrifugal fire pump.vi. Double stage compressor unit.vii. Solution feed cylinder mounted chlorinator.viii. Chlorinc leak detector.

2. Sewerage Disposal

i. Gate valves.ii. Check valves.iii. Roto-disintigrator.iv. Pressure gauges.

3. Plumbing

i. Flange gate valvesii. Gate valves.iii. Check valves.iv. Air relief valves.v. Pipe ventilators.vi. Safety valves.vii. Screwed bronze ball valves.viii. Pressure gauges.ix. Thermometers.x. Anti-moisture insulation.xi. Thermal insulation.xii. Pressure reducing valve.xiii. Fire hose cabinets complete with accessories.xiv. Siamese.

FORM

[ See condition (2)]


INDEMNITY BOND

THIS DEED OF INDEMNITY is made on the __________day of__________BETWEEN Messers ____________having registered office at ____________(hereinafter called“the importer or specified contractor” which expression shallinclude their successors, administrators, executorsand assignees) of the one part, AND the President of Pakistan through theCollector 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 given in the said Notification been pleased to direct that theplant, machinery, equipment and materials imported for the purposes shall be exempted from so much of thecustoms duty as is in excess of 10% ad valorem and whole of sales tax as specified in the said notification.

AND WHEREAS M/s ____________________ having registered office at______________have imported theplant, machinery, equipment and materials, in accordance with theconditions given in the aforesaid Notification forinstallation at____________________________________

(address of the importer/specified contractor)

NOW, THEREFORE, in consideration of the release of plant, machinery, equipmentand materials, without recovery of the leviable customs duty and sales tax the importer/specified contractorbind themselves to pay on demand to the Government of Pakistan the sum of Rs. _________ being thecustoms-duty and sales tax leviable on the machinery and equipment, if the importer fails,-

44

(i) to produce an installation certificate from the relevant Assistant Collector or DeputyCollector of Customs, Lahore International Airport, Lahore, within one year from thedate of importation of machinery and equipment; and

(ii) to produce other evidence as the Collector of Customs may require to satisfy himselfthat the plant, machinery, equipment and materials has been installed in accordance withthe conditions of the said notification.

The importer or specified contractor further agree and bind themselves that the amountof duty covered by this Bond may be recovered as arrears of customs-duty under section 202 of the CustomsAct, 1969 (IV of 1969).

The Bond shall stand discharged when the aforesaid certificate, proof or documentshave been produced and the Collector of Customs is satisfied that the importer/specified contractors havefulfilled all the conditions of this Bond and the aforesaid Notification.

Signed by importer/specified contractor on this _____________day of ___________________________________

Managing Director(Name and permanent address)

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 or above or an officer of ascheduled bank.

SCHEDULE OF MACHINERY IMPORTED

[C.No.2(28)Mach/98]

RIAZ AHMAD MALIKADDITONAL SECRETARY


( REVENUE DIVISION )


NOTIFICATION

CUSTOMS

S.R.O.438(I)/2001.- In exercise of the powers conferred by section 19 of the Customs Act, 1969(IV of 1969), and in supersession of its Notifications No. S.R.O.279(I)/94, dated the 2nd April, 1994,S.R.O.429(I)/95, dated the 30th May, 1995, S.R.O.462(I)/95, dated the 4th June, 1995, S.R.O.585(I)/95, datedthe 1 st July, 1995, S.R.O.150(I)/97, dated the 5th March, 1997, S.R.O.557(I)/97, dated the 28 th July, 1997 andS.R.O.622(I)/98, dated the 18th June, 1998, the Federal Government is pleased to direct that the machinery andequipment or machinery, equipment and construction material as the case may be, which is not manufacturedlocally and specified in column (2) of the Table below for the projects specified in column (3) of the Table

45

shall be exempt from so much of customs-duty, leviable thereon under the First Schedule to the said Act, as isin excess of the rates specified in column (4) of the said Table, subject to the following conditions, namely:-

(1) the importer shall, at the time of import submit a detailed packing list of the goodsspecified in Explanation below and shall also make a written declaration on the bill ofentry tot he effect that the machinery, equipment and spares have been imported for thespecified category of the project claimed on the bill of entry;

(2) the importer shall furnish an indemnity bond in the form set out herein below to theextent of customs duty exempted under this notification, and the said bond shall not bedischarged till,-

(i) in case of temporary importation, the production of bill of export supported byrelated invoice and other shipping documents attested by the Collector of Customs(Exports), having jurisdiction, as a proof that the said machinery and equipmenthave been re-exported; and

(ii) in case of permanent importation, the production of installation or consumptioncertificate from Assistant Collector or Deputy Collector, within one year from thedate of importation of machinery and equipment, after due verification by theAssistant Collector or Deputy Collector of Customs and Central Excise in whosejurisdiction the project is located. Such certificate of verification shall clearly statethat machinery and equipment imported for the purposes specified in the bills ofentry have been duly installed or consumed;

(3) in the event of non-production of such certificate by the importer the Collector ofCustoms shall enforce the indemnity bond and proceed to recover government duesunder section 202 of the Customs Act, 1969 (IV of 1969), and the rules madethereunder; and

(4) spares and maintenance parts required for the project after its commissioning shall besubject to

customs-duty at the rate of twenty per cent ad val.

Explanation.- For the purposes of this notification,-

(1) the expression “machinery and equipment” shall mean,-

(a) machinery and equipment operated by power of any description, such as is used inrespective category of projects specified above;

(b) apparatus and appliances, including metering and testing apparatus and appliancesspecifically adopted for use in conjunction with machinery and equipmentspecified in clause (i);

(c) mechanical and electrical controls and transmission gear adapted for use in or withclause (i);

(d) all machinery and equipment imported temporarily for the construction, erection,installation and end completion of the project including specific equipmentsrelevant to the category of project and specialized vehicles (4x4 non-luxury), butexcluding passenger vehicles; and

(e) component parts of machinery and equipment as specified in clauses (a), (b), (c)and (d), identifiable as for use in, or with, such machinery and equipment importedfor the category of project specified above including spares for purposes of thesaid project; and

(2) the expression “not manufactured locally” shall mean the goods which are not includedin the list of locally manufactured goods, specified in the General Order, issued by theCentral Board of Revenue or certified as such by the Engineering DevelopmentBoard/Central Board of Revenue.

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TABLE-------------------------------------------------------------------------------------------------------------------------------------S.No. Descripiton of goods Projects Rate of duty (1) (2) (3) (4)

1. Machinery, equipment, For setting up or balancing, modernizat ion and 0% ad val.and construction Materials extension of Power generation i.e. oil,, gas, coal,including coal mining Wind and wave energy project including underequipment. Construction project which entered into an

Implementation agreement with the Governmentof Pakistan.

2. Machinery and equipment For setting up or balancing, modernization and 10% ad val.including coal mining extension of Power generation through oil, gas,equipment. coal, wind and wave energy projects including

under constructions projects.

3. Machinery and equipment. For setting up of hydel power generation projects 10% ad val.including under construction projects.

4. Machinery, equipment and For construction of Ghazi Barotha Hydro Powerconstruction materials as Project covered by:-already imported or to beimported by WAPDA or itscontractors.

(i) contract C-01 and C-02 (Barrage and power 0% ad val. channel construction).

(ii) Contract C-03 and contracts ME-01 and ME-02 2% ad val. (civil works of power complex & ancillary works, for mechanical and electrical works respectively).

5. Plant and machinery For setting up or for balancing, modernization, 5% ad val.imported or to be replacement or extension of Chashma HydropowerImported by WAPDA, its Project undertaken by WAPDA, M/s Marubenicontractors M/s Marubeni Corporation, Japan (EM-1 contract) andCorporation Japan (EM-1 M/s Cegelec & Complex of France (EM-2 contractor)Contractor) and M/s Cegelec and Complex Of France(EM-2 Contractor).

6. Machinery and equipment. Transmission system projects and grid station 10% ad val.Including under construction projects.

FORM

[See Condition (2)]


INDEMITY BOND

THIS DEED OF INDEMNITY is made on the ________day of ___________BETWEEN Messers_______________ having registered office at ___________(hereinafter called “the importer” whichexpression shall include their successors, administrators, executors and assignees) of the one part, AND the

47

President of Pakistan through the Collector of Customs ___________(hereinafter called “the Collector ofCustoms”) of the other part;

WHEREAS the Federal Government has, vide its Notification No. S.R.O._______, dated the ______,and subject to the conditions given in the said Notification been pleased to direct that the machinery andequipment, imported for the purposes and categories specified therein, shall be exempted from so much of thecustoms duties as specified in the said notification.

AND WHEREAS M/s___________________ having registered office at ________________haveimported the machinery and equipment in accordance with the conditions given in the aforesaid Notificationfor ______________(mention purpose of project) of ______________(mention category of project), namely_________________ (mention name of project), in accordance with the said notification.

NOW, THEREFORE, in consideration of the release of machinery and equipment without recovery ofthe leviable customs duty, the importers bind themselves to pay on demand to the Government of Pakistan thesum of Rs. ________ being the customs-duty leviable on the machinery and equipment, if the importers fails,-

(a) to produce a certificate from the Assistant Collector of Central Excise within one year from thedate of importation of machinery and equipment.

(b) to produce other evidence as the Collector of Customs may require to satisfy himself, that themachinery and equipment has been installed in accordance with the conditions of the saidNotification.

(c) to produce in case of temporary importation the bill of export supported by related invoice andother shipping documents attested by the Collector of Customs (Exports), having jurisdiction, asa proof that the said machinery and equipment have been re-exported.

The importers further agree and bind themselves that the amount of duty covered by this Bond may berecovered as arrears of customs-duty under section 202 of the Customs Act, 1969 (IV of 1969).

This Bond shall become void when the aforesaid certificate, proof and documents have been producedand theCollector of Customs is satisfied that the importers have fulfilled all the conditions of thisBond and the aforesaid Notification.

Signed by importers on this ___________________ day of __________________

-------------------------------Managing Director

(Name and permanent address)On behalf of the importer

Collector of CustomsOn 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 or above or an officer of ascheduled bank.


Dr. Manzoor AhmadAdditional Secretary

48

GOVERNMENT OF PAKISTANMINISTRY OF FINANCE AND ECONOMIC AFFAIRS, STATISTICS & REVENUE

REVENUE DIVISION


NOTIFICATION

CUSTOMS

S.R.O.439(I)/2001.- In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IVof 1969), and in supersession of its Notification No. S.R.O.369(I)/2001, dated the 17th June, 2000, the FederalGovernment is pleased to direct that the plant, machinery and equipment, not manufactured locally, importedby –

(a) the export industries shall be exempt from so much of the customs-duties leviable under the FirstSchedule to the said Act as are in excess of five per cent ad valorem provided the export industryannually exports minimum average fifty percent of its production in first ten years and forexpansion of existing unit, they should export fifty per cent of additional capacity created underexpansion;

(b) hi-tech industries specified in column (2) of Table I below, shall be exempt from so much of thecustoms-duties leviable under the First Schedule to the said Act as are in excess of five per centad valorem;

(c) value added industries specified in column (2) of Table II below, shall be exempt from so muchof the customs-duties under the First Schedule to the said Act as are in excess of five per cent advalorem; and

(d) priority industries specified in column (2) of Table III below, shall be exempt from so much ofthe customs-duties leviable under the First Schedule to the said Act as are in excess of ten percent ad valorem, subject to the following conditions, namely-

(i) The importer shall, at the time of import of plant, machinery and equipment, make a writtendeclaration on thebill of entry specifying the category of industry and that the plant, machineryand equipment has been imported in accordance with this notification and will be used formanufacturing in the category of industry claimed on the bill of entry;

(ii) the importer shall furnish an indemnity bond in the form set out below to the extent of customs-duty exempted under this notification. The said bond shall not be discharged till production ofan installation certificate, within one year from the date of importation of plant, machinery andequipment, from the Assistant Collector or Deputy Collector of Customs and Central Excise, inwhose jurisdiction the project is located and such certificate shall clearly state that plant,machinery and equipment imported for the purposes specified in the bill of entry have been dulyinstalled;

(iii) in the event of non-production of such certificate by the importer, the Collector of Customs shallenforce the indemnity bond and proceed to recover Government dues under section 202 of theCustoms Act, 1969 (IV of 1969), and the rules made thereunder; and

(iv) in case any provision of this notification is violated, the Collector of Customs shall proceed torecover Government dues besides taking punitive action under the law.

Explanations,- For the purposes of this notification, the expression,-

(i) “not manufactured locally” shall mean the goods, which are not included in the listof locally manufactured goods, specified in the General Order, issued by theCentral Board of Revenue or certified as such by the Engineering DevelopmentBoard and Central Board of Revenue; and

(ii) “machinery and equipment” shall mean,-

49

(a) machinery operated by power of any description, such as is used in industrialprocesses;

(b) apparatus and appliances, including metering and testing apparatus andappliances specially adapted for use in conjunction with machinery specifiedin sub-clause (a) above;

(c) mechanical and electrical control and transmission gear adapted for use ofgoods specified in sub-clause (a) above; and

(d) component parts of machinery and equipment specified in sub-clauses (a)and (b) above, identifiable for use in or with such machinery and equipment.

TABLE I

-------------------------------------------------------------------------------------------------------------------------------------Sr. No. Type of industry(1) (2)

Hi-tech Industries:

1. Process control equipment/systems; power tools/pneumatic tools.2. Powder metallurgical industry and manufacture of alloys and stainless steel.3. Information Technology.4. Solar technology/solar cell industry.5. Aerospace.6. Defence Production.7. Hermetical sealed (HS) technology.8. Oil refining (mineral oil)/hydrocracking and other value added petroleum products.

TABLE II


Valued Added Industries:

CERAMIC PRODUCTS:

1. Refractory goods such as refractory cements, refractory bricks, refractory blocks and refractory tiles.2. Ceramic ware for laboratory, chemical or other technical uses.3. Ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing cisterns,

urinals and similar sanitary fixtures.4. Table ware and kitchen ware.5. Ceramic filter elements.6. Electric insulators.

ARTICLES OF IRON AND STEEL

1. Seamless pipes.2. Spring and leaves for springs of steel.3. Radiators for central heating, non-electrical heating and parts thereof, of iron or steel.4. Industrial chains for power transmission and parts thereof.5. Sewing needless and knitting needles.

50

CHEMICAL AND ALLIED INDUSTRIES:

1. Hydrocabons and their Halogenated, sulphonated, nitrated or nitorsated derivatives.2. Industrial alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives.3. Phenols, phenol-alcohols, and their halogenated, sulphonated, nitrated or nitrosated derivatives.4. Ethers, alcohol peroxides, ether peroxides, ketone peroxides, epoxides with a three membered ring,

acetals and hemiacetals, and their halogenated, sulphonated, nitrated or nitrosated derivatives.5. Aldehyde-function compounds.6. Ketone-function compounds and quinone-function compounds.7. Carboxylic acids and their anhydrides, halides, peroxides and peroxyacids and their halogenaed,

sulphonated, nitrated or nitrosated derivatives.8. Esters of inorganic acids and their salts, and their halogenated, sulphonated, nitrated or nitrosated

derivatives.9. Organo-inorganic compounds, heterocyclic compounds, nucleic acids and their salts and

sulphonamides.10. Provitamins, vitamins and hormones.11. Glyeosides and vegetables alkaloids, natural or reproduced by synthesis and their salts, ethers, estrs

and other derivatives.12. Basic manufacturing of inorganic chemicals, insecticides, rodenticides, fungicides, herbicides, anti-

sprouting products and plant-growth regulators, disinfectants.13. Binders for foundry moulds or cores.

ENGINEERING AND ALLIED (SUBJECT TO PROGRESSIVE DELETION):

1. Machinery and mechanical appliances.2. Vehicles, aircraft, vessels and associated transport equipment.3. Optical, photographic, cinematographic goods, measuring, checking, precision instruments, parts and

accessories thereof.4. Musical instruments and toys, part and accessories of such articles.5. Semiconductors and other components (Microprocessors, Memory Devices, transistors, diodes, logic

gates, microcontrollers, integrated circuits (ASICS), Liquid Crystal Displays (LCDs), Capacitors,Resistors, Printed Circuit boards, Fabricated Wafers, Silicon Wafers, Lead-frames, Cassettemechanisms, Magnetic Heads and Cathodes Ray Tubes, Advanced Waferfab manufacturing,Photomasking, Microelectonic circuits, semiconductor materials).

6. Consumer electronics (Television Receivers, TV picture tubes, video players, video cassette, videocameras, audio products, electronic games).

7. Electrical Appliances (Refrigerators, air conditioners, toasters, vacuum cleaners, blenders, foodprocessors, ovens, microwave ovens, shavers, hair dryers).

8. Gas absorption chillers.9. Electrical industrial apparatus (Switchgears, electric motors, transformers, generators, electricity

meters, controllers, relays, voltage regulators, welding and cutting equipment, starters, switches andfuses, circuit breakers, contractors, power transmission equipment and parts).

10. Critical components of automobile manufacturing (components of engine, gear box, suspension,robotics for chassis and body manufacturing, electrical and mechanical accessories, compressednatural gaskets).

11. Automotive parts tools and dies manufacturing.12. Rubber components and parts.13. Automotive or automobile progressive manufacturing.14. Valves and controls for fluids and gas, high pressure and high temperature piping and fixings.15. Specialized pumps including solar pumps for chemical or petroleum industry.16. Elevators and escalators.17. Ship building.18. Turbines (all types).19. Generators for power plants.20. Seamless high-pressure cylinders.21. Compressors.22. Locomotives/Passengers carriages/goods carriages.

51

TEXTILE:

1. Yarn made form cotton and man-made textile material.2. Silk woven and its value added products.3. Cotton and blended woven fabrics or their products.4. Articles of apparel and clothing accessories all types.5. Man made staple fibres.6. Woven fabrics of synthetic staple fibres.7. Carpets and other textile floor coverings.8. Knitted or crocheted fabric.9. Automobile textiles.10. Blankets and travelling rugs.11. Bed linen, table linen, toilet linen and kitchen linen, etc.12. Curtains (including drapers) and interior blinds, curtain or bed valances.13. Drying, printing and finishing.

PHARMACEUTICAL PRODUCTS:

All basic and integrated manufactured pharmaceutical products.

PHOTOGRAPHIC OR CINEMATOGRAPHIC GOODS:

1. Photographic plates and film in the flat such as X-ray.2. Photographic film in rolls.3. Photographic paper.4. Cinematograph film.5. Chemical preparation for photographic uses.

GENERAL OR MISCELLANEOUS:

1. Complete leather processing or articles of leather.2. Footwear goods.3. Surgical goods, sports goods or cutlery.4. Soft, stuffed and battery toys.5. Frozen concentrated citrus juices.6. Seafood industry (farming/catching, processing and preservation of fish, shrimp and other marine

products).7. Mining or mineral processing.8. Manufacture of industrial plants, machinery and equipment including mining or mineral processing,

agricultural and earthmoving machinery.9. Rubber and textile chemicals, dyes and pigments.10. Petro-chemicals or petro-chemical down stream products (including fibers).11. Chloro-alkali.12. Paper or newsprint manufacturing (starting from pulp).13. Manufacture of bio-medical medical diagnostic equipment and devices.14. Research and development and technical testing facilities.15. Fruits, vegetables and flowers-grading, processing, packing, preservation.16. Production of quality or hybrid seeds.17. Natural or cultured pearls, precious or semi-precious stones.18. Precious metals, metals and clad with precious metal and jewelry/imitation jewelry.19. Glass or glass ware.

52

TABLE III


Priority Industries:

1. Specialized paints or coatings.2. Fire-fighting foam.3. Fertilizers.4. Treatment and disposal of toxic and hazardous industrial wastes, sewerage, effluent or solid waste

management, water supply.5. Edible of extraction or refining.6. Livestock and poultry feed.7. Integrated poultry, livestock complex including the facility for processing and packing.8. Milk processing and milk products and dairy products.9. Agro-based products bi-products and chemicals (e.g. cotton, sugar cane, rice, corn-based like cattle

feed, cellulose and its products, industrial alcohol, glycerin, fructose, furfural, Xylose etc.)10. Tourism, Hotels and Tourism Related Projects.11. Housing and Construction Industry.

FORM

[ See condition (2) ]


INDEMNITY BOND

THIS DEED OF INDEMNITY is made on the __________ day of ____________BETWEENMessers _________having registered office at _________(hereinafter called “the importer” which expressionshall include their successors,administrators, executors and assignees) of the one part, AND the President ofPakistan through the Collector of Customs____ (hereinafter called “the Collector of Customs”) of the otherpart;

WHEREAS the Federal Government has, vide its Notification No. S.R.O._______, dated the_____________, andSubject to the conditions given in the said Notification been pleased to direct that theplant, machinery and equipment, notmanufactured locally, imported for __________________ (mentioncategory of industry) shall be exempt from so much of the customs duty, as specified in the said Notification.

AND WHEREAS M/s _____________________ having registered office at _______________ haveimported the plant, machinery and equipment as is not manufactured locally, in accordance with the conditionsgiven in the aforesaid Notification for installation at _____________________.

(address of industrial unit).

NOW, THEREFORE, in consideration of the release of plant, machinery and equipment withoutrecovery of the leviable customs duty, the importers bind themselves to pay on demand to the Government ofPakistan the sum of Rs.____being the customs-duty leviable on the plant, machinery and equipment, if theimporters fail to produce a certificate from the Assistant Collector of Central Excise within one year from thedate of importation of plant, machinery and equipment to the effect that the machinery has been installed at thesaid unit.

The importers further agree and bind themselves that the amount of duty covered by the Bond may berecovered as arrears of customs-duty under section 202 of the Customs Act, 1969 (IV of 1969).

The Bond shall void when the aforesaid certificate has been produced and the Collector of Customs issatisfied that the importers have fulfilled all the conditions of this Bond and the aforesaid Notification.

53

Signed by importers on this _________________ day of _________________.

-------------------------------------Managing Director

(Name and permanent address)

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 or above or an officer of ascheduled bank.


Dr. Manzoor AhmadAdditional Secretary

concession on import appendx-ii

Documents