IMPORTS
When the goods arrive at port or dry port, the importer will file the Bill of Entry giving the detail of imports, Value of imports, Rate of duty &Tariff.
Customs appraisal officer will carry out an assessment of goods according to the rules/tariff manual. Depending upon the assessment following taxes will be remitted by the importer: Custom duty based upon ad valorem, specific rate or both. Sales tax - 15% of ad valorem + custom duty. With-holding tax 4% of ad valorem + custom duty + sales tax. Regulatory duty as imposed by the government from time to time under the power of customs act.
EXPORTS
To dispatch the shipment, the exporter will submit shipping bill. The customs appraisal officer will examine the goods for correctness of declared description, value, and claimed duty drawback. Thereafter the goods will be allowed for shipping.
Pre-Shipment Inspection
When a bank confirms letter of credit it only guarantees that the payment will be made after shipment. In other words it assures shipment but relies on exporter to ship the goods described in the document. To prevent losses due to substandard shipment, the importers, nowadays, rely upon pre-shipment inspection agencies for inspection and appraisal of goods. One example of such company is COTECHNA. These companies help the importer in establishing correct value of goods prior to shipment.
REBATES, CONCESSIONS & DUTY DRAWBACK
The government gives incentives to the importers and exporters in the shape of concessions and rebates/ duty drawback. For example concessions have been given to the importers of:
- 10% duty without sales tax in Textile Machinery
- Duty exempted up to 300MW Power Plants
- Leather Machinery & other Export oriented Goods
Some concessions are provided on freight as recently it has been provided to the textile sector @ 25% on the export of non quota woolen and silk products from export development fund
Duty Drawback
When some raw materials are imported from abroad, the taxes are paid upon them as part of import policy. If this raw material is consumed in manufacturing of exports, the government compensates the exporter by refunding the taxes (previously collected), in the shape of duty drawback. The rates of duty drawbacks are announced by the government from time to time. For example recently duty drawback rates have been announced for textile industry.
