REAP proposal regarding ST rejected

Karachi—The Finance Ministry has turned down the proposal of Rice Exporters Association of Pakistan (REAP) to allow exemption of customs duty and sales tax on import of grain storage silos.

The REAP had proposed the Federal Board of Revenue (FBR) to allow this exemption under the true spirit of SRO No. 575(1)/2006 from the date on which the said exemption was allowed. The proposal was sent to the FBR and it was forwarded to the Ministry of Finance for consideration in the upcoming Federal budget.

However, the sources confirmed that the Finance Ministry has turned down this proposal and did not include in the proposals for the upcoming Federal budget.

According to REAP Chairman, the FBR had allowed the benefit of said SRO to ‘silos’ as being covered as an equipment under the term ‘storage’ used in the SRO, but this practice was discontinued in recent past due to a stricter interpretation of the term ‘machinery and equipment’.

In a letter, the REAP Chairman had requested the Chairman FBR to instruct Customs Department to implement the true spirit of SRO No. 575(1)/2006, dated 05-06-2006 with effect from the date of last budget i.e. June 03, 2011 as mostly the imports made after this date were affected by the aforesaid strict interpretation of the term ‘machinery and equipment’.