040127

GOVERNMENT OF PAKISTAN
REVENUE DIVISION
CENTRAL BOARD OF REVENUE

Islamabad the 27th January, 2004

Subject: PAYMENT OF 1% SURCHARGE FOR SEEKING EXTENSION OF TIME LIMIT UNDER SRO 410(I)/2001 DATED 18.06.2001.

Central Board of Revenue has received several representations wherein a question has been raised whether under condition (2) of SRO 410(I)/2001, in case of exemption of the period of 12 months for input 6 months, monthly surcharge @ 1% of C&F value of temporarily imported input materials is payable on the whole quantity of such materials or it is payable only on their balance (unutilized) quantity. Earlier, this issue was examined in CBR and clarification was issued vide letter C.No.5(2)EP/2001 dated 14th April 2003 that the said 1% surcharge shall be paid on the entire C&F value of such imported input materials.

2. CBR has again examined the issue and is pleased to clarify that the time period of one year given in condition (2) of SRO 410(I)/2001 DATED 18.06.2001 is linked with the re-exportation of goods, while, on the other hand, the expression ‘utilization period’ has been used barring the extension of thereof beyond eighteen months. Utilization generally means consumption but in the context of the said condition it means ‘consumption-cum-re-export’. Therefore, surcharge cannot be demanded in respect of input materials, which have been utilized and re- exported within 12 month’s original utilization period.

3. This clarification is issued in suppression of CBR’s earlier letter C.No.5(2)EP/2001 dated 14th April 2003, it is, however, reiterated that in no case utilized period shall be extended by the Collectors beyond eighteen months and that too after physical verification that temporarily imported goods are actually lying in stock and there is no apprehension of loss of revenue because of deterioration etc. All such cases shall also be thoroughly audited in order to ensure in the exported release of security that all temporarily imported goods in keeping with input-output ratios determined by IOCO in a case of the subject importer-cum-exporter or by any other importer-cum-exporter of identical goods under this scheme or under DTRE scheme.

4. This clarification is issued to further facilitate exporter and shall have prospective effect. Hence, it does not confer any right, whatsoever, to claim or take refund of any amount of such surcharge already paid by any person or otherwise realized or recover from him.

(Iftikhar Qutab)
Chief (Duty Drawback System)