Temporary Importation Scheme (SRO-818/89)

• Application for exemption is made to the Customs giving full particulars of the goods and the purpose of import.
• A Bank Guarantee, or an Indemnity Bond alongwith post-dated cheque, equal to the amount of Customs duty and Sales Tax is furnished to the Customs, binding the importer to re-export the finished goods within a period of one year, extendable for a further period of six months, in deserving cases, at the discretion of Customs and subject to such conditions as may be deemed fit.  Failure to export within the stipulated period attracts enforcement of the Bank Guarantee or Indemnity Bond / post-dated cheque.
• The imported goods should be capable of identification at the time of re-export.
• Packing material may be imported empty and exported filled.
• On importation, the importer has to declare on the Bill of Entry that the goods are imported for the purpose of SRO-818/89.  At the time of re-export, the exporter has to declare on the Bill of Export that the materials were imported for the purpose of SRO-818/89 and to give particulars of import documents.  Under Customs General Order (CGO) No: 5/1991 dt: 3.6.91, the import is to be released within 24 hours.
• After re-export, evidence of re-export within the stipulated period has to be given to the Customs upon which the Bank Guarantee / Indemnity Bond is discharged, within 7 days of export under CGO-5/91.
• Transfer of ownership of temporarily imported goods may be allowed by Customs, at their discretion, subject to transfer of Bank Guarantee / Indemnity Bond, but only in cases where the imported goods have undergone the manufacturing process to reach an intermediary product stage.
• If temporarily imported goods are used in addition to duty-paid materials, and duty drawback is admissible on the export of finished products, the FOB value of export is reduced by the value of the duty-free imported goods, for the purpose of calculation of duty drawback amount.
  

Import of accessories for textile/leather garments, and leather goods (SRO-954/98)
Under SRO-954(I)/98 dated 7.9.98(App:9.2), imports of accessories, specified in Schedule I to SRO-954/98 are allowed free of Customs duty and Sales Tax, for export of garments including leather garments, flat goods, ladies hand bags and soft luggage items, subject to the following conditions:

• Customs duty/Sales Tax exemption under SRO-954/98, is available only to the extent of 5% of the FOB value of exports, to be declared by the exporter on each Shipping Bill, giving particulars of import documents and the total FOB value of re-exported goods so far.
• Application for exemption is made to the Customs giving full particulars of the goods and the purpose of import. Only one point of entry for such imports is available as per the declaration of the importer.
• An Indemnity Bond alongwith post dated cheque, equal to the amount of Customs duty and Sales Tax is furnished to the Customs, binding the importer to re-export the finished goods within a period of one and a half year. Failure to export within the stipulated period attracts enforcement of the Indemnity Bond / post-dated cheque.
• On importation, the importer has to declare on the Bill of Entry that the goods are imported for the purpose of SRO-954/98.  At the time of re-export, the exporter has to declare on the Bill of Export that the materials were imported for the purpose of SRO-954/98 and gives particulars of import documents. 
• After re-export, evidence of re-export within the stipulated period has to be given to the Customs upon which the Indemnity Bond is discharged.
• Transfer of ownership of temporarily imported goods may be allowed by Customs, at their discretion, subject to transfer of Indemnity Bond.
• If temporarily imported goods are used in addition to duty-paid materials, and duty drawback is admissible on the export of finished products, the FOB value of export is reduced by the value of the duty-free imported goods, for the purpose of calculation of duty drawback amount.
  

Some important variations between the Temporary Importation Scheme under SRO-818/89 and the import of specified accessories under SRO-954/98 need to be noted as under:

• SRO-954/98 provides exclusively for duty-free import of accessories, only for textile and leather garments and leather goods, and not the other export industries specified in SRO-818/89.
• Imports of accessories under SRO-954/98 are limited to 5% of the FOB value of the finished goods exported. There is no such limit under SRO-818/89.
• SRO-954/98 provides only for Indemnity Bond/post dated cheque, instead of the option of Bank Guarantee / Indemnity Bond under SRO-818/89.
• SRO-954/98 allows a period of one and a half year for re-export as distinguished from SRO-818/89 which allows the period of one year extendable by six months on merits of each case.
• The condition of the imported goods being identifiable at the time of re-export provided in SRO-818/89 is not applicable under SRO-954/98, but all the importable accessories are actually identifiable at the time of re-export.
• Other conditions and procedures, including the admissibility of duty drawbacks on export of finished goods, are nearly the same under both SRO-818/89 and SRO-954/98.
• Duty-free imports under both SRO-818/89 and SRO-954/98 can be made with or without having a Customs Manufacturing Bond.

Duty-free import of certain garment accessories by members of Garment Associations (SRO-224/94)
Certain materials required for production of textile garments, not covered in SRO-954/98, nor under SRO-818/89, are importable without payment of Customs duty under SRO-224(I)/94 dated 5.3.94 9(App:9.3). This SRO particularly covers the import of lining and furlinning materials, among other items.  Under this SRO, the importer has to be a member of one of the five Garment associations, the following  

• Pakistan Cotton Fashion Apparel Manufacturers and Exporters Association.
• Pakistan Readymade Garments Manufacturers and Exporters Association.
• Pakistan Hosiery Manufacturers Associatin.
• Pakistan Knitwear and Sweaters Exporters Association.
• Pakistan Art Silk Fabrics and Garments Exporters Association.

The materials importable under SRO-224/94 are listed in Table I of SRO-224/94(App:9.3), and can be imported subject to the following conditions

• The manufacturer-cum-exporter has to attach with each Bill of Entry a certificate by the concerned Association to the effect that he is registered as exporter and makes a declaration on the Bill of Entry giving full particulars of the imported goods and their use.
• An Indemnity Bond is to be provided covering the leviable Customs duties alongwith a certificate by the President or the Secretary of the concerned Association to the effect that if he fails to re-export the finished goods, within one year, the Association itself will be responsible for payment of the duty involved. 
• If the importer is not in a position to provide Indemnity Bond, a Bank Guarantee or a post-dated cheque, certified by the concerned bank, is to be furnished to the extent of duties involved.
• If the importer intends to make regular imports under SRO-224/94, he may furnish a standing Bank Guarantee for imports to be effected during the whole financial year, instead of Indemnity Bond in individual cases of imports.
• The importer has to intimate to the Customs Station from which the goods were imported, full particulars of exports, separately accounting for the goods not exported, with copies of relevant Shipping Bills and Bills of Lading.
• The Customs Station concerned maintains an import-wise account in the prescribed register.
• At the time of export, the manufacturer-cum-exporter declares on each Bill of Export, the quantity of goods imported and their particulars.
• Wastage is allowed upto 3% of the quantity imported.
• Indemnity Bond is discharged on providing full account of the quantities imported, within the stipulated period.
• The importer-cum-manufacturer is not entitled for duty drawbacks on exports of the finished goods.
  

Duty reduction on imports of materials for export of leather made-ups (SRO-1332/90)

A number of raw materials, accessories and components are importable free of duties, for the purpose of export production, into Customs Manufacturing Bonds or under No Duty - No Drawback Rules or under Temporary Importation Schemes (SRO-818/89 and SRO-954/98).  For certain items required in export production of leather made-ups and footwear that are not covered under the aforementioned modalities, and to facilitate those manufacturer-cum-exporters who do not operate Customs Manufacturing Bonds, SRO-1332(I)/90  dated 26.12.90 (App:9.4) allows import of accessories and parts of footwear, at a reduced Customs duty of 10%.  The items covered are listed in the Table to SRO-1332/90 (App:9.4) and can be imported subject to the following conditions:-

• The manufacturer-cum-exporter has to declare on the Bill of Entry that he is an exporter of leather made-ups and to give full particulars of the imported goods and their use.
• The benefit of duty reduction is also available for goods consigned by an overseas person without cover of Letter of Credit. 
• An Indemnity Bond is to be furnished by the manufacturer-cum-exporter, to the effect that if he fails to re-export the goods within one year, or a further period not exceeding six months as may be allowed by the Customs, the Indemnity Bond will be enforced.  As an alternative to Indemnity Bond, a Bank Guarantee for the duties involved can also be provided.
• The manufacturer-cum-exporter has to keep an account of the goods imported, received, consumed and exported.
• The Customs Station from where the goods are imported, have to be informed about the export of finished products within the stipulated period.
• At the time of export, on each Bill of Export, the quantity of goods imported and used in the leather made-ups being exported, has to be declared.
• Wastage of imported goods is allowed upto 3% of the quantity imported.
  

Duty-free Raw Materials for Leather Goods

SRO-1319(I)/96 dt 24.11.96 (App:9.5) allows duty-free clearance of the following raw materials, into manufacturing bonds, for manufacture of leather goods wholly for export:

• Raw and pickled hides and skins(ii)Wet blue hides and skins
• Finished leather; and
• Accessories, components and trimmings for leather manufacturers.