ISLAMABAD - The ECC of the Cabinet on Thursday decided to lift ban on gold import by 31st August and approved new schemes for importing gold and new policy for encouraging manufacture of motorcycles.
The ECC met under the Chairmanship of Senator Mohammad Ishaq Dar, Finance Minister. The ECC has approved a new policy for encouraging investment in the manufacturing of motorcycles industry with new technology. The salient features of the policy are: at the start of commercial production of new entrants, localisation level shall be kept at a minimum of 25pc in the first year and 15pc each for the subsequent four years, by the end of 5 years, localisation level shall reach a minimum of 85pc at an average of at least 15pc localisation per annum, minimum investment entitled for this policy would be $100 million up to the commercial operation date and new technology will be defined by the Engineering Development Board (EDB) and recommended by a Committee comprising Chairman, BOI, Secretary, Commerce and Secretary, Industries, and have to be approved by the ECC. The ECC was given a detailed briefing on the present state of affairs and financial health of the Pakistan Steel Mills by the Secretary, Industries Shafqat Naghmi. The ECC directed the Secretary Industries to sit with the Secretary Finance even if they have to work on weekends and come up with a workable solution.
The ECC decided that ban on import of gold will be lifted on 31st August when the new scheme becomes operative. The revised scheme for import of gold will have the following salient features. i. The quantity of gold importable by a single party under the revised scheme will be capped at 25kg on revolving basis. ii. Under the revised scheme a beneficiary is obligated to export the imported gold in the form of value added gold jewellery within 120 days. This time limit previously was 180 days. iii. Under the revised scheme it will now be mandatory to have a contract notarised from the foreign country’s legal authorities and then the same would also need to be duly attested by the relevant Pakistan missions abroad. Under the previous scheme, foreign buyers entrusted and sent the gold to the Pakistani exporter on the basis of a plain paper contract. iv. Under the revised scheme it is now decided to increase the minimum value addition requirements for plan gold bangles/chains, plain gold jewellery and studded jewellery, respectively to 8pc, 12pc and 13pc. The previous minimum value addition requirement in SRO 266(I)/2001 was 4pc, 6pc and 9pc. v. It will be prohibited to sell gold imported under this scheme in the domestic market. Penalties under the prevalent laws will be applicable in case of violation. vi. Random testing of jewellery export consignments will be done at airports to ensure that they are fully in conformity with the declaration made to the Customs. Otherwise, penalties shall apply for mis-declaration and any violation of the SRO under prevalent laws including of the Imports and Exports Control Act, 1950.
Under the current scheme exporters can get 100pc of the export proceeds in the form of gold. This facility defeats the very purpose of encouraging exports in this sector. Therefore, in further under this scheme no more than 50pc of export proceeds will be realized in the form of gold. Resultantly at least 50pc will need to be repatriated in foreign exchange through normal banking channels.
Under the current scheme the maximum period allowed for realisation of export proceeds in the form of gold is 240 days and for foreign exchange is 180 days. Now both these periods are being reduced to 120 days. In order to ensure effective over sight and closer coordination between concerned agencies, the import and export of value added gold jewellery under this SRO will only be allowed from duly notified Customs station.
In the area of procedural improvements, inter-alia, the following steps will be taken: Effective information and date exchange between TDAP and Customs will be ensured on real time basis in order to minimise and eliminate existing loopholes in the system. The internal processing procedures of TDAP and FBR will be streamlined in order to present circumvention of the requirement of the SRO and for this purpose detailed administrative instruction are being issued.
In addition to other measures, in future higher ranking TDAP Officers will be responsible for processing requests for registration and import/export authorization. The final approval in all such cases will come from TDAP Headquarters Karachi. This will ensure that circumvention of the legal requirements do not take place in regional TDAP offices.
The revised schemes will not be applicable to those transactions where gold has been imported under the existing SRO 266. Finance Minister has said that the new scheme for re-export of gold will not be applicable to those who have imported gold or authorised to import under the existing scheme.
The meeting was attended by Minister for Information, Broadcasting and National Heritage Senator Pervaiz Rasheed, Minister for Planning Ahsan Iqbal, Minister for S&T Zahid Hamid, Minister for Information Technology Anusha Rahman and Heads of different Divisions and Departments.