Tax exemption on import of aircraft, spare parts

ISLAMABAD: The government has granted tax exemption on import of aircraft, spare parts and maintenance kits through the proposed Finance Bill 2015-16.
However, there has been growing criticism that tax exemption on aircraft would benefit the rich as well as influential political class of the country who are now rampantly using planes to undertake visits to different parts of the country.
The proposed second schedule of Finance Bill 2015-16 states that under National Aviation Policy 2015, the federal government is going to exempt the goods including aircraft, spare parts, maintenance kits, machinery, equipment & tools, machinery, equipment, operational tools, furniture & fixture and aviation simulators.
Chairman FBR Tariq Bajwa told the Senate Standing Committee on Finance on Friday that the government introduced these incentives to provide relief to the national flag carrier which was going to import planes in future. It is in line with the national aviation policy to boost this sector.
This exemption has been proposed with certain conditions under which it binds those who avail themselves of this facility that (i) the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall certify that the imported goods/items are the company’s bonafide requirement.
He shall furnish all relevant information online to Pakistan Customs Computerized System against a specific user ID and password obtained under section 155D of the Customs Act, 1969 (IV of 1969).
In already computerized Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Director Reforms and Automation or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis;
(ii) The exemption shall be admissible on production of certificate by the Aviation Division, Government of Pakistan to the effect that the intending importer is operating in the country or intends to operate in the county in the airline sector;
(iii) The list of imported items is duly approved by the Aviation Division, Government of Pakistan in line with Policy Framework approved by the Government of Pakistan;
(iv) the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall furnish an undertaking to the customs authority at the time of import that the goods imported shall be used for the purpose as defined/notified by the Aviation Division, Government of Pakistan under the Aviation Policy; and
(v) In case of deviation from the above stipulations, the Collector of Customs shall initiate proceedings for recovery of duty and taxes under the relevant laws.