SIALKOT: Collector of Model Customs Collectorate Sialkot Qurban Ali Khan, while taking a great step towards betterment of the Export Processing Zone (EPZ) Sialkot, has now allowed sub-contracting from the Sialkot EPZ to Tariff Area Facility under the Rule 234.
An official notification issued here in this regard revealed, “Whereas it is expedient to mitigate the difficulties faced by the industrial undertakings with respect to non-availability of skilled labour and vendor facilities within the premises of the EPZ and to provide level playing field to the said EPZ Unit vis-à-vis Bonded manufacturers, the following procedure is devised under Rule 234 of Chapter 7 of Customs Rules, 2001 issued vide SRO 450 (I) 2001 dated 18.06.2001.”
Giving the general guidelines in this matter, Collector Qurban revealed that the facility of sub-contracting shall be restricted only to such type of items which are capable of identification at the time of removal from and re-entry into the EPZ, after the goods have been processed. Sub-contracting, for the purposes of this Standing Order, means processing of goods in tariff area from the material supplied to a vender by an EPZ unit, under contract to return the processed goods for use in subsequent export by the EPZ unit.
The Collector in the notification added that the EPZ unit desirous of obtaining sub-contracting permission shall, at the time of applying to the Collector of Customs, Model Customs Collectorate, Sambrial (Sialkot) furnish, in the format prescribed by the MCC, Sambrial (Sialkot), an undertaking/Indemnity Bond on a non-judicial stamp paper, prescribed by the Model Customs Collectorate Sambrial (Sialkot), stating therein to abide by all the rules and conditions laid down in this Standing Order and any other subsequent order by the Collector of Customs, or any other law for the time being enforce. This shall be on one time basis and shall remain in force till the unit operates in the EPZ or the permission for sub-contracting under this order is revoked by the Collector, as the case may be. The unit shall also submit a crossed / post dated cheque valid for the period of six (06) months, in favour of the Collector of Customs, Model Customs Collectorate Sambrial (Sialkot), amounting to Rs.1.5 million or quarterly average of duty & taxes leviable on goods imported in the last financial year, whichever is higher.
The post dated cheque may be encashed in case of EPZ unit fails to comply with outstanding recoveries of government dues.He said that for each activity of sub-contracting under Rule 234 of the Customs Rules, 2001, the unit shall submit an application on specific format along with samples of the imported material lying in EPZ Sialkot. Qurban Ali Khan narrated that upon receipt of the approval for removal / entry of goods from Sialkot EPZ for sub-contracting, the concerned Customs staff after examination shall keep record of goods leaving or entering the EPZ. The unit shall submit duly signed samples of raw material leaving the EPZ and finished goods received against it. The samples will be retained and preserved by the Customs and EPZ unit till the completion of the export. The EPZ unit shall produce approval of sub-contracting to the Customs staff posted at gate for allowing the goods to tariff area.
The description of goods will be entered in a register maintained at the gate by Customs / EPZ showing the description of goods, import G.D details, addresses of the vendors or any other information prescribed by the Collector from time to time. A gate pass showing the vehicle number will also be prepared by the EPZ unit and signed both by the Customs staff & EPZ authorities.
Goods removed for sub-contracting shall be returned to the zone within 90 days. This time limit shall be further extendable upto 60 days by the Additional Collector Customs, Model Customs Collectorate Sambrial (Sialkot) on receipt of application from unit explaining cogent reasons for the desired extension.
A master register, showing the details of raw materials imported, manufactured and exported goods shall be maintained by the EPZ unit. The register shall have columns and it shall be 18” in width and 20” in length containing 200 pages with serially stamped or printed page numbers on the left and right corner of each page to the presented to the Customs authority, as and when required.
At the time of application under this Standing order the unit shall submit a chart of manufacturing process and specifically indicate process (s) which is/are to be sub-contracted. No application will be entertained where the sub-contracting is more than 40% of the total process.
Consumption formulas stating input and output ratio shall be submitted to the Model Customs Collectorate Sambrial (Sialkot) for approval at the time of obtaining permission for sub-contracting by the unit. The EPZ unit shall maintain record of the vendors showing material supplied to them and processes to be performed by them.
The cheque shall be released upon application by the EPZ unit which will be filed by him along with copy of export GD duly verified by the authorized Deputy Collector / Assistant Collector of Customs.
All the sub-contracting activities in the tariff area would be subject to prevalent tax and other laws applicable in the tariff area of Pakistan. If any EPZ unit fails to render proper account of the imported consignment or a part thereof to the satisfaction of the Customs, such unit shall be liable to pay customs duty and other taxes leviable on such goods in addition to any penalty for violation of Law and Rules for the time being enforced.
In case of any deficiency or lacuna in this procedure, the Customs shall resort to the Customs Rules, 2001. The Deputy Collector / Assistant Collector Customs & Incharge of EPZ will have a close watch on the working of this procedure and will submit a report in the first week of March 2015 to revisit the whole issue including implications of this Standing Order in consultation with the stakeholder of Export Processing Zone (EPZ) Sialkot and Gujranwala.
The Collector of Customs may revoke the permission to sub-contracting under this order, as a consequences or risk of violation of any rules contained therein or any law for the time being enforced or non-compliance of any recoveries of government dues adjudged against the unit. The permission shall stand revoked when the unit informs that it has ceased to, or intends to cease manufacturing in the EPZ.