Amendment in Customs Rules, 2001
GOVERNMENT OF PAKISTAN
(REVENUE DIVISION)
FEDERAL BOARD OF REVENUE
Islamabad, the 2nd July, 2018.
NOTIFICATION
S.R.O. 831(I)/2018.- In exercise of the powers conferred by section 219 of the
Customs Act, 1969 (IV of 1969), the Federal Board of Revenue is pleased to direct that
the following further amendments shall be made which have been previously published
vide S.R.O No.648(I)/2018 dated 24th May, 2018 in the Customs Rules, 2001, namely:–
In the aforesaid Rules,-
(1) for the existing preamble, the following shall be substituted and shall be
deemed always to have been so substituted, namely:-
“In exercise of the powers conferred by section 219 of the Customs Act,
1969 (IV of 1969), section 50 of the Sales Tax Act, 1990, section 40 of the
Federal Excise Act, 2005 and section 237 of the Income Tax Ordinance,
2001 (XLIX of 2001), the Federal Board of Revenue is pleased to make the
following rules, namely:-”;
(2) in rule 43, in sub-rule (1),-
(i) in clause (iii), the word “and” at the end shall be omitted and
thereafter, the following new clause shall be inserted, namely:-
“(iv) “perishable goods” means goods that rapidly decay due to their
natural characteristics, in particular in the absence of
appropriate storage conditions; and”;
(ii) the existing clause (iv) shall be renumbered as clause (v); and
(iii) in clause (v), re-numbered as aforesaid, after the word “of”
appearing for the first time, the words “perishable goods” shall be
inserted;
(3) after rule 47, the following new rule shall be inserted, namely:-
“47A. In cases of delay, occurred in the release of
perishable goods and upon written request of the importer or
exporter, the reasons of such delay may be communicated.”;
(4) in rule 54, for the words “fifty thousand”, the words “five hundred thousand”
shall be substituted;
(5) in rule 74, in sub-rule (1), after the word “bidder”, the words “within thirty
days of the date of rejection of bid” shall be inserted;
(6) in rule 92, in clause (d), for the acronym “PACCS”, the acronym “CCS” shall
be substituted;
(7) in rule 93, in sub-rule (1), the word “simultaneously” shall be omitted;
(8) in rule 95,-
(i) in sub-rule (3), for the word “Change”, the expression “Subject to the
fulfillment of conditions provided for eligibility of applicant in rule 92,
change” shall be substituted;
(ii) in sub-rule (6), after the word “Pakistan”, the expression “subject to
the condition that no criminal proceedings under Customs Act or
Rules made thereunder are pending against the company” shall be
inserted; and
(iii) in sub-rule (7), for the word “number”, the word “certificate” shall be
substituted;
(9) in rule 96, in sub-rule (1), in clause (a), after the word “partners”, the words
“or directors” shall be inserted;
(10) in rule 97, in sub-rule (1), after the word “documents”, the words “and
attend hearing” shall be inserted;
(11) in rule 99, in sub-rule (1), after the word “Lahore’, the words and commas “,
Multan, Faisalabad, Sialkot, Quetta, Peshawar” shall be inserted;
(12) in rule 133, in sub-rule (1), in clause (i), after the word “Superintendent” the
word “or Inspector or Appraiser” shall be inserted;
(13) in rule 226, in sub-rule (9),–
(i) after the word “Authority” the words “but in no case exceeding two
years” shall be added; and
(ii) for the full stop at the end, a colon shall be substituted and thereafter
the following proviso shall be added, namely:–
“Provided that the Collector of Customs may extend the
aforesaid period by one year.”;
(14) in rule 227, for sub-rule (1), the following shall be substituted, namely:–
“(1) Goods from the Tariff Area, required for further
processing in a Zone, shall be admitted after completion of export
formalities, including filing of export GD, which are normally
observed for export out of the country. The Importer in the Zone
shall file corresponding Import GD for allowing entry of goods in the
Zone.”;
(15) in rule 228, in sub-rule (5), at the end, after the full stop, the following shall
be added, namely:–
“The condition of supply of twenty percent of the total production to
tariff area shall not include the supplies made from the EPZ to tariff
area under SRO 492(I)/2009 dated 13.06.2009 or DTRE scheme or
Manufacturing Bond scheme or Export Oriented Units scheme, as
the case may be, as the same are used for manufacture of goods
which are eventually exported out of Pakistan.”;
(16) in rule 229, for sub-rule (2), the following shall be substituted, namely:–
“(2) Any goods permitted by the aforesaid authority for
entry into the Tariff Area under sub-rule (1) may be taken out of the
Zone after fulfilling all the requirements prescribed under the Act and
the Rules made there-under for the direct import from aboard into
the Tariff Area. The investor shall file export GD against the goods
being exported from Zone to Tariff Area and the importer in the Tariff
Area shall also file corresponding Import GD.”;
(17) in rule 232, the existing rule shall be renumbered as sub-rule “(2)” of that
rule and prior thereto, the following new sub-rule shall be added, namely:–
“(1) The importer shall maintain proper accounts of the imports,
production, export, transfer and wastages of the raw materials and
finished goods to the satisfaction of the Collector of Customs.”;
(18) after rule 235, the following new rule shall be added, namely:–
“235A. Transfer of ownership by investor or industrial
undertaking.- No transfer of ownership by any investor or industrial
undertaking of its unit or cancellation of license shall be finalized by the
Authority without prior issuance of NOC from the Collector of Customs.”;
(19) after newly inserted rule 235A, the following new rule shall be inserted,
namely:–
“235B. Audit.- The concerned Collectorate of Customs shall
conduct annual audit of units operating in Export Processing Zone.”;
(20) in rule 296, in sub-rule (1), in clause (i), in sub-clause (c), after the word
“oil” the words “or coal” shall be inserted; and after the word “electricity”
the oblique and word “/energy” shall be inserted;
(21) in rule 299, in sub-rule (4), for the second proviso, the following shall be
substituted, namely:–
"Provided further that quantity equivalent to 100% capacity
of the producing or manufacturing unit may be approved
provisionally by the Regulatory Collector, as applied by the DTRE
user, however upto fifty percent quantity may be allowed to be
used by the time IOCO or EDB determines input/output ratios.”;
(22) in rule 300, in sub-rule (2), for the word “thirty”, the word “eighteen” shall
be substituted;
(23) after rule 304, the following new rule shall be added; namely:–
“304A.- Facility of vendor.– The DTRE user may remove input or
semi-finished goods out of his premises for manufacture or processing by
the vendors after intimating the Collector in the form as set out in
Appendix-V to this chapter:
Provided that the DTRE applicant, at the time of applying for DTRE
Approval, shall declare in his application about the process that he intends
to get done from a vendor, alongwith particulars of the vendor. The vendor
shall have a valid Sales Tax Registration and his name shall be appearing
in the Sales Tax Active taxpayers list. The vendor shall have in-house
manufacturing facility to perform the stated manufacturing process. The
vendor shall not be changed or added except with prior permission of the
Regulatory Collector. However, the said vending facility shall not be
available for the weaving of fabric from yarn:
Provided further that the finished goods may be removed directly
for export by the exporter from the vendor premises to the customs port of
export.”;
(24) in Chapter XII,-
(i) in sub-chapter 7, after Appendix-IV, the following new Appendix
shall be added, namely;
“APPENDIX-V
[see rule 304A]
GOVERNMENT OF PAKISTAN
COLLECTORATE OF CUSTOMS _________
APPLICATION FOR TRANSFER OF GOODS BY DTRE USER TO
A VENDOR
The Collector,
Collectorate of Customs,
Custom House _____________.
I / We, M/s.___________________________________________
(Name, Address, NTN, STRN of the DTRE user)
currently DTRE user vide DTRE Approval No.________________
intend to transfer the following raw materials (covered under the
said DTRE Approval) / semi-finished goods as per following details
from our facility located at _________ to M/s.
_________________________________________,
(Name, Address, NTN, STRN of the Vendor)
having all requisite facilities for the purpose of further
manufacturing processes
i.e.___________________________________________________
(COMPLETE FLOW CHART OF PROCESSES ATTACHED)
| Description of goods to be transferred to vendor | PCT Heading | GD/ST Invoice No. & Date | Whether to be transferred goods are input (covered under the approval) or semi- finished goods | Quantity | Value in Rs. | Value (per unit) | Duty & Taxes rate (item wise) | Total Duty & Taxes involved |
|---|---|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| Extent (%) of approved quantity of input goods involved in this transfer | Indemnity Bond No. & date | Nature of operation (s) to be performed by vendor | Value of further processes | Proforma Invoice No. date | Date of transfer of goods | Date on which transferred goods will be retrieved / returned back from vendor | Vendor’s services charges payable | Extent (%) of value addition |
| 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 |
(ii) for sub-chapter 8, the following shall be substituted, namely:–
“SUB CHAPTER 8
DETERMINATION OF MATERIALS AND FIXATION OF RATES
- Definitions.– In this sub-chapter, unless there is
anything repugnant in the subject or context,-
(a) “applicability “means and includes,–
(i) determination of input output ratio of input materials of a
class or description used in the manufacture of products
permissible for export under any relevant Export Policy
Order for the time being in force, on which repayment or
drawback of custom duties is allowed, the calculation of
input to output ratios and the fixation of rates for the
purposes of repayment or drawback thereon;
(ii) the determination of input to output ratios of all input
materials of a class or description used in the
manufacture of products which are exported from
Pakistan under any Duty or Tax Remission Scheme as
specified under the provisions of the Act or Rules or any
notification issued there-under;
(iii) determination of the quantity of raw materials, sub-
components, components, sub-assemblies, assemblies
and the input to output ratios of all products of a class or
description specified under any concessionary import
scheme for the local manufacture and supply of goods
as specified in the relevant notifications; and
(iv) determination of input to output ratios of all input
materials of a class or description used in the
manufacture of products specified under any
concessionary or special import or domestic supply
scheme on reference from any authority or agency; and
(b) “Directorate General of Input Output Coefficient Organization
(IOCO)” means an organization established by the Board to
authorize, regulate or monitor duty or tax remission or
exemption under survey-based concessionary notifications
determining input-output ratios, wastages and fixation of rates
for repayment or remission or drawback of custom duty
and/or any other assignment relating thereto;
(c) “Association” means a representative trade body of persons
engaged in manufacture, production or commercial import or
export of goods of a class or description on which repayment
or draw back or remission or concession of customs duty or
any other tax is allowed and duly registered under the law in
force relating to registration of such Association;
(d) “Board” means the Federal Board of Revenue;
(e) “CC and I” means the respective Chambers of Commerce
and Industry recognized and affiliated with the FPCCI;
(f) “Director General” means the officer of Customs holding
charge as the Director General of IOCO and duly notified by
the Board in this regard;
(g) “Director IOCO (South)” means the officer of Customs holding
the charge of Director IOCO (South) having jurisdiction over
areas in Sindh and Balochistan Provinces and duly notified by
the Board in this regard;
(h) “Director IOCO (North)” means the officer of Customs holding
the charge of Director IOCO (North) having jurisdiction over
areas in Khyber Pakhtunkhwa, Gilgit-Baltistan and Rawalpindi
Division and duly notified by the Board in this regard;
(i) “Director IOCO (Central)” means the officer of Customs
holding the charge of Director IOCO (Central) having
jurisdiction over areas in Punjab province excluding
Rawalpindi Division and duly notified by the Board in this
regard;
(j) “EDB” means Engineering Development Board working under
the Ministry of Industries and Production, responsible for the
determination of input to output ratios and wastages for
engineering goods, whenever required;
(k) “FPCCI” means the Federation of Pakistan Chambers of
Commerce and Industry;
(l) “Individual Notification“ means a notification relating to the
determination of input goods and fixation of Custom Duty
repayment or drawback rates in relation to all goods related to
sub-clause (a) of clause (i) of this rule and which are
applicable in case of a specific manufacturer named therein;
(m) “input materials” means all such imported goods or materials
used in the manufacture of goods or products which are
specified in any of the cases given at clause (a) above to
which this sub-chapter is applicable;
(n) “manufacture” means any process incidental or ancillary to
the completion of such finished goods which are produced or
manufactured from input goods;
(o) “manufacturer” means a person engaged in any process
incidental or ancillary to the manufacture of goods;
(p) “products” means all such finished goods manufactured in
Pakistan and meant for export or exported outside Pakistan or
for local supply inside Pakistan, from time to time;
(q) “Schedule” means a Schedule to this Sub-Chapter;
(r) “Sector Specialist” means a qualified person having the
required professional expertise in various sectors and
appointed as sector specialist in Directorate General of IOCO
or an officer of Customs posted as sector specialist by the
Board;
(s) “Standard Notification” means a notification relating to the
standard determination of imported input materials and
fixation of Custom Duty Repayment or drawback rates in case
of goods of a class or description which is not limited or
restricted to an individual manufacture but is applicable in
general cases; and
(t) “Tax” means tax levied under the Sales Tax Act, 1990 or
Income Tax Ordinance, 2001 or any other levy imposed by
the Federal Government which has been remitted under any
special or general concessionary notification on imported or
exported goods for the time being in force.
- Powers and functions of IOCO.– (1) For the purposes of
this Sub-Chapter, the Board shall establish a Directorate General of IOCO
which shall be headed by an officer of Customs not below in rank than a
Director General.
(2) The Board shall ensure that the Director General is assisted
by the Director(HQ), Director (North), Director (Central) Director (South),
Additional Directors, Deputy or Assistant Directors and as many officers of
customs including Sector Specialists who in the opinion of the Director
General may, from time to time, be required for the purposes of this sub-
chapter.
(3) The Director General and other officers including the sector
specialists shall all be officers of customs in terms of section 3 of the Act.
(4) All officers including the sector specialists appointed or
holding a post in the Directorate General of IOCO shall exercise the
powers and discharge duties conferred or imposed under the Act
throughout Pakistan and in such other areas where the Act has been
applied.
(5) The head office of the Directorate General of IOCO shall be
located at Karachi, or at any other place recommended by the Board and
it shall have, as many regional offices at other places in Pakistan as in the
opinion of the Board may, from time to time, be necessary for the
purposes of this sub-chapter.
(6) The officers including the sector specialists, subject to such
limitations, conditions or restrictions specified in this sub-chapter, shall be
authorized to take all such steps or actions as may be necessary for
achieving the purposes of the rules under this sub chapter and which shall
amongst other include surveys of the manufacturing premises of any
manufacturer, inspection, examination and audit of the commercial
records or other documents and conduct any other verification check
whatsoever as the officer or sector specialist may deem fit.
(7) The sector specialist shall be an appropriate officer for
requisitioning in writing information or documents, in terms of section 26 of
the Act, for the purposes of the rules under this sub –chapter but subject
to the limitation and conditions on the exercise of such powers and
discharge of such duties as specified in the rules.
(8) The applications or any other document whatsoever made
or signed or caused to be made or caused to be signed or delivered or
caused to be delivered to any officer of the Directorate General of IOCO
including the sector specialist shall be a declaration and document in
terms of section 32 of the Act. Where any such document relates to an
Association, the liability of the office bearers thereof shall be joint and
several for the purposes of section 32 of the Act. Furthermore, any
statement made in answer to any question put to the person giving the
statement, shall be a statement in terms of section 32 of the Act.
(9) If any person in connection with any matter under the rules
under this sub-chapter without any reasonable excuses fails to comply
with any requisition made under the Act or to furnish any information as
required by or under this sub-chapter to be furnished shall be liable to the
penalty prescribed under the Act.
(10) If at any stage the sector specialist or any other officer of the
Directorate General of IOCO is satisfied that a survey or audit of any
manufacturing premises or any other business premises is required to be
conducted for the purposes of or in connection with any matter under this
sub-chapter, he shall inform the Director and after his written approval
proceed to conduct the survey or audit. The manufacturer or producer
selected for this purpose shall be notified in this regard who shall allow
free access to the records relating to the manufacturing process or any
such record as in the opinion of the person conducting the survey or audit
is essential for the purposes of or in connection with the rules under this
sub-chapter.
- Standard rate for purposes of Standard Notification.– (1)
In cases falling under sub-clause (i) of clause (a) of rule 308, the
concerned Association shall apply to the Director General through an
application in the form as set out in Schedule for the purposes of this sub-
chapter.
(2) The Director may call for any further information or make
any addition to the particulars of an application as he may deem fit.
(3) At the time of submitting an application, the Association
shall specify the complete calculations in accordance with the method of
calculation as the Board may notify separately and shall also furnish
therewith the worksheets. However, when the new product is of such a
nature that in respect of it the agreed method of calculation is not
applicable, the Association shall declare the details of the method of
calculations on which the working is based. All applications made under
this sub-rule shall be acc