ITFE Assignment

8/8/2019 ITFE Assignment

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OVERVIEW:

Import and Export policy orders (Act 1950) are two separate documents issued by the

Government every year which contain the instructions about how the imports and exports

can be made better. It also highlights the products which are completely restricted to

import and encouraged or discouraged to import and export with all conditions. Mostly

importers and exporters keep the points of these policies in mind while they trade as most

of them are mandatory to follow. This assignment would discuss both the documents

(Year 2009) in detail and highlight the major features of them.

IMPORT POLICY ORDER:

In the beginning of this document it has been clearly defined that it would be called

Import Policy Order and it would be into force at once only. Some important definitions

regarding trade have been defined as follows:

(1). DEFINITIONS:

POLICY

ORDRES

EXPORTIMPORT



a. ACT: It means the imports and exports act 1950. It means that the documents

have been designed by keeping this act in mind which has been passed by national

assembly and the president of Pakistan. None of the instructions would violate the

act.

b. ANNEX: It simply means an Annex to the order.

c. APPENDIX: It simply means Appendix to the order.

d. BANNED ITEMS: The products and commodities are stated in it which are

completely prohibited and not allowed to import in the country according to the

act.

e. INDUSTRIAL USER: It means the establishment of an industry which would

import for its own use

f. JOB LOT: Different types of goods that are for sale as one lot. Normally the

quality of such goods is inferior which means not better.

g. STOCK LOT: These goods remain in stocks because of changes in market

conditions and the tastes of people and are also presented such as one lot.

h. PLACE OF ORIGIN: It means the country which has manufactured and

supplied the products.

i. RESTRICTED ITEMS: There is a bit difference in banned and restricted

items. As described above, banned items are not allowed to be import in the

country in any circumstances while the restricted items can be imported but with

the conditions mentioned in the order.

j. SAMPLES: These are the goods in limited quantity most of the time for testing

purposes and have no commercial value.

k. TARRIF AREA: It means the area in Pakistan which is outside the limits of an

export processing zone.

(2). BASIS OF IMPORTS:

I. The imports can be made against any mode of payment such as cash, credit or any

instrument but it is mandatory to follow the procedure which has been described

by State Bank of Pakistan. No importer can go against that procedure.



II. Private importers are allowed to enter in commodity exchange arrangement with

the suppliers outside of Pakistan by following the procedure described by State

Bank of Pakistan.

III. If any importer is importing the goods by acquiring loan or on credit, the contracthas to be approved by Economic Affairs Division or any other agency of the

Government. Besides that, it is mandatory to open letter of credit or documentary

credit with a bank designated by States Bank of Pakistan, within the sixty days

after registration of that contract.

IV. All public sector agencies will open the letter of credit through the banks

designated by State Bank of Pakistan

(3). IMPORT OF GOODS:

Import of all goods and commodities are allowed through the entire world but banned,

prohibited and restricted items stated by the act cannot be imported from anywhere.

(4). PROHIBITIONS AND RESTRICTIONS:

Goods specified in ³Appendix A´ are prohibited to import. Some of the goods from that

appendix are as follows:

I.

Translation of Holly Quran without the Arabic text.

II. Goods bearing any rude, offensive and shocking pictures, writings, inscriptions or

visible representations.

III. Anti Islamic literature or Material

IV. Any products or bi products containing the ingredients of such animals which have

been stated HARAM by Islam are not allowed like pork, swine, pig, hogs and

bores.

V. Any product which is not good for human consumption or dangerous.

VI. The goods, whose usage or disposal may injure the religious feelings of any

sector, class/group of people in Pakistan.



VII. Cocoa leaves, Poppy Straw and Cannabis Herbs. Cocoa is a black powder which is

used to make chocolates and Poppy is a type of plant. Cannabis is a drug.

VIII. Opium is also not allowed. It is also a type of Drug.

IX. Alcoholic beverages and spirits.

X. Fireworks or equipment of fireworks

XI. Retreaded tyres. It means a new rubber surface on the outer part of any worn tyre.

XII. Any fighting vehicles including tanks.

XIII. Military weapons, machine guns, bombs, sniper rifles, automatic rifles, pistols,

revolvers etc.

XIV. Gambling Equipment

Goods specified in Appendix-C are banned for import in secondhand or used condition

except those specifically exempted. Some of the items are (broilers, compressors, Air

Conditioners, Refrigerators, Hand Tools, House hold type machinery, Auto Parts etc.)

Imports from ISRAEL are completely banned in Pakistan.

Goods specified in ³Appendix B´ are restricted but can be imported subject to the

conditions. Some of those goods are as follows:

I. Live animals, animal semen and embryos.(Importable subject to quarantine requirement of Marine and Fishery Department of Ministry of

Food, Agriculture and Livestock, Government of Pakistan.)

II. Fish and fishery products.

(Importable subject to quarantine requirement of Marine and Fishery Department of Ministry of Food, Agriculture and Livestock, Government of Pakistan.)

III. Fresh and Dry fruits.(The report saying that the consignment is free from any pests/diseases, to be certified by

Department of Plants Protection, Ministry of Food, Agriculture and Livestock.)

IV. Red Chilies, (Whole)



(The report saying that the consignment is free from any pests/diseases, to be certified by theDept. of Plant Protection, MINFAL.)

V. Wheat(Importable subject to the specification notified by the Ministry of Food & Agriculture,

Government of Pakistan and subject to pre-shipment inspection by approved PSI agencies)

VI. Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes(Packets should carry the warning µsmoking is injurious to health)

VII. All edible (Safe to eat) products(Must be fit for human consumption, free of any HARAM elements, at least 50% of shell lifefrom the date of import)

VIII. All narcotic drugs and psychotropic substances, except items on banned list.(Only pharmaceutical units having valid drug manufacturing license can import such items but

with authority from Ministry of Health)

IX. Human blood and its fractions(Consignment shall be released on production of AIDs and hepatitis B & C free certificate.)

X. Passport printers, visa printers, laminators and laminate rolls(Import of the following types of passport printers, visa printers, laminators and laminate rolls

shall be allowed only by Directorate General Immigration and Passports)

Import of goods from India or of Indian origin is restricted to the items in Appendix-G.

Import from India is not allowed by road unless so specified. (Some goods include

Buffalos, Bulls, Cows, Sheep, Goats, Milk in powder, Silk worm eggs, some vegetables

like tomatoes, onions, garlic etc.)

(5). DISPUTE ABOUT IMPORT STATUS:

Any dispute or clarification regarding import status of any item which cannot be resolved

by the Customs Authorities shall be referred to Ministry of Commerce for final decision.

(6). CLEAR ANCE OF IMPORTABLE GOODS SENT BY

OVERSEAS PAKISTANIS WITHOUT INVOLVEMENT OF

FOREIGN EXCHANGE:



The consignee of goods in Pakistan is allowed to get clearance on the goods sent by

overseas Pakistanis without any condition of sales tax registration. It will be allowed by

the concerned collectors of customs.

(7). IMPORT OF CAR BY DISABLED PERSONS:

The disable persons can import any car ³whose capacity is not exceeding 1350cc´,

without any custom duty as it is subject to authorized by Federal Board of Disabled

Persons. It will be only for the purpose of personal use only

(8). COMPLIANCE:

It is mandatory for all the Banks and Customs to ensure that all requirements, conditions

and restrictions etc. specified in import and export act.

(9). IMPORT OF VEHICLES UNDER PERSONAL BAGGAGE,

TR ANSFER OF RESIDENCE AND GIFT SCHEMES:

To Pakistani citizens, Import of vehicles as defined in the relevant rules is allowed but the

procedure specified in ³Appendix E´ has to be followed. Some of the conditions and

regulations are as follows.

I. Students (receiving remittances), Not earning members of families, those who

have imported, gifted or received a vehicle during the last two years are noteligible for it.

II. Vehicles more than three years old shall not be allowed to be imported under gift,

personal baggage and transfer of residence schemes.

III. A vehicle may be gifted only to a family member normally resident in Pakistan.

IV. The cars with engine capacity of 1800 cc or more, and 4x4 vehicles in new

conditions can be imported under personal baggage or gift scheme but the duty

and taxes will be paid out in foreign exchange arranged by Pakistan nationals

themselves or local recipient supported by Bank encashment certificate stating theconversion of foreign money to local currency.

V. Agricultural tractors, bulldozers, laser land levelers and combined harvesters will

also be allowed under gift, baggage and transfer of residence schemes subject to

the same conditions as applicable for import of vehicles. The import thereof under

gift scheme will be allowed once every year.



VI. Vehicle imported by an overseas Pakistani shall be released to his/her legal heirs

in case of death.

(10). SUSPENSION OR BAN OF IMPORT:

The Federal Government can suspend or ban the import of any goods from all or anysource for a specific period of time. Meanwhile that, no importer is allowed to import

such products.

Export policy order

The following things regarding export will be in practice after issuing the policy order,

and that the updated export policy order shall come into force at once.

(1) Some Definitions

Act is the import and export act 1950. It is according to the law of Pakistan and each and

every trader would to abide by the practices of the law made by the parliament of the

respective country.

The policy clearly states those good (gifts and parcels) that are allowed or not allowed to

export from the country.

Prescribed are the points which are according to the rules and regulation of this act.

Sample is a very small part of something and if a sample is being exported it should not

be for the sale purpose and should not have value.

(2) Basis of export



The export from Pakistan shall be according to the rules and regulations of foreign

exchange and these should be noted by the state bank of Pakistan at different intervals

and complete documents should be submitted as stated in the export policy order.

(3) Export of goods(1) All the goods can be exported from Pakistan except those which are in the schedule

1 of the import order policy. Some of them are chemicals, wild mammals and

reptiles, pulses, wheat, sugar, gram flour, urea, wood and timer, charcoal and

firewood etc.

Some of the goods are subject to the condition; it means if they fulfill the condition

only then they can be exported otherwise not.

(2) A. Goods consisting the equipments and machinery parts are allowed to export,

the provisions of the policy order does not apply to them unless these items are

banned or restricted.

B. The policy does not apply to the goods which are trans-shipped and being

cleared at the port of the Pakistan and are dispatched at another port outsidePakistan.

C. This order policy does not apply to the goods which are being sold by one

government to another. And exports made by any authorized officer by the

ministry of defense.

D. It doesn¶t apply to some samples subject to some conditions, means they can

be exported if they are not banned. The value of any sample should not exceed

25 thousand us dollars. And in case of automobiles manufacturers it shouldnot exceed 50 thousand us dollars. And pharmaceutical companies are allowed

to export free samples to the extent of 10% of the exports quantity of

proceeding years. And at the launch of a product these companies can export

free samples to the extent of 20% of the quantity of first consignment.



E. The policy does not apply to the parcel which is not exceeding five thousand

us dollars and equivalent to the amount in Pak rupees.

F. Export of relief good to any part of the world by government of Pakistan.

G. Authentic (real) person who is travelling outside Pakistan.

H. The person travelling outside Pakistan may take good with them without any

restriction provided that these goods are not restricted as in schedule1 and 2.

(3) Transit and border trade shall be allowed under the procedure prescribed thereof.

(3).Relaxation

The federal government may allow export, export cum import or re-export for any

prohibition or restriction under this order.

And they may issue authorization for such exports. It should be on proper letter head,

numbered and which shall be valid for period of six months unless the period is specified.

(5). Re export of frustrated cargo.

Re export of the frustrated cargo shall be allowed by the custom authorities subject to the

conditions contained in the custom rules 2001.

(6). Export to Afghanistan and through Afghanistan to central

Asian republics

1. The export of all commodities produced or manufactured in Pakistan, excluding those

manufactured in manufacturing bonds and export oriented units, shall be allowed via land

route, against Pak-rupee on filing of regular shipping bills without µE¶ Form.

Such exports shall not be entitled to,

(i) Zero-rating of sales tax on taxable goods;

(ii)

Rebate of centr

al excise duty;

and

(iii) Repayment or drawback of customs-duty.

2. All items and commodities produced or manufactured in Pakistan, exported via land

route or by air against irrevocable letters of credit, confirmed orders on realization of

export proceeds through banking channel or advance payment, in convertible foreign

currency, shall be allowed.

a) Zero-rating of sales tax on taxable goods;



b) Rebate of central excise duty; and

c) Repayment or drawback of customs-duty, subject to the following conditions.

i. The proof that goods exported from Pakistan have reached Afghanistan shall be

verified on the basis of copy of import clearance documents by Afghan Customs

Authorities across the border.

Provided that this condition shall not apply to exports made to International

Security Assistance Force (ISAF) and Defense Logistic Support Center (DLSC)

in Afghanistan.

ii. Packages or retail packing shall be prominently and indelibly be marked with the

expression ³For Export Only´, and in case of international donor agencies ³For Export

only ± supply for aid to Afghanistan (insignia of the organization) ± not for sale in

Pakistan´;

iii. Export shall be allowed only through authorized export land routes i.e. Torkham,

Chaman, Ghulam Khan (for export of cement only) and Qamar Uddin Karez (when it

becomes operational);

iv. Export from Export Processing Zones, manufacturing bonds and export oriented units,

except vegetable ghee and cooking oil, shall be allowed but these exports shall not be

entitled to-

(i) Zero-rating of sales tax on taxable goods;

(ii) Rebate of federal excise duty; and

(iii) Repayment or drawback of customs-duty:

v. Zero rating of sales tax or duty drawbacks as well as federal excise duty refund against

goods exported to ISAF and Defence Logistics Agency(DLA), may be allowed on

production of receipts issued by ISAF and DLA confirming that they have received the

goods. The receipts will be reconfirmed by the representatives of these agencies located

in Pakistan.

(7) Exports By International Donor Agencies.

Export of such goods as are made by or on behalf of UNHCR, World Food Programmed,UNDP, UNFPA, ICRC, WHO, FAO, UNICEF against international tenders, as relief

goods to Afghanistan, shall be allowed the facility of normal duty drawback against

payment in convertible foreign currency, through all standard modes of payment

including letters of credit, advance payment and DA or DP basis.

(4) Normal duty drawback shall remain available on exports to the Central Asian

Republics via Iran.



(5) Export of acetic anhydride to Afghanistan shall not be allowed till further orders.

(8) Export cum import

Imported items may be exported for the purpose of repairs, refilling of cylinders subject

to the customs authorities undertaking that goods being exported shall be re imported

after the purpose of their exporting is accomplished. And for the goods for whom

replacement is needed and they have to be replaced due to defectiveness, the condition of

indemnity bond shall not apply on them.

Customs authorities shall allow Pakistani exporters to replace the exported goods found

defective as per terms of sale contract subject to furnishing of.-(a) A copy of contract; and

(b) A communication from the buyer detailing the goods that have been found to be

defective.

Export-cum-import of vehicles shall be allowed for purposes of traveling abroad, on the

basis of carnet de passage issued by Automobile Association of Pakistan, or a guarantee

issued by International Chamber of Commerce, Pakistan or on indemnity bond furnished

by the owner of the vehicle to the customs authorities.

(9) Re-export of Goods or items (except ba

nned itemsas perSchedule-I and items on

The negative list of Afghan Transit Trade as specified in Schedule III)Export of imported goods in their original and unprocessed form shall not be allowed

except,

(a) Parts obtained from ship breaking;

(b) Scrapped battery cells;

(c) Waste dental amalgam;

(d) Waste exposed X-ray films;

(e) Old machinery provided no refund of import levies or duty draw back shall be made;



(f) Items imported against back to back letter of credit for re-export subject to the

procedure and conditions notified by the State Bank of Pakistan;

(g) Imported goods in their original and unprocessed form provided that re-export is

made against sight letter of credit, advance payment, usance letter of credit, Documents

Acceptance (DA) or Deferred Payment (DP).

(h) Where the manufacturer-cum-exporter imported goods with the condition that

payment will be made on quality approval and the quality of the goods is not approved;

(j) where goods imported under various duty free schemes meant for exports and could

not be consumed due to cancellation of export order; and.

(k) Old vehicles and aircrafts not falling within the definition of antiques.

(10) Re-export of humanitarian food commodities. ±

All humanitarian food commodities are allowed to be re exported by international

humanitarian aid and relief agencies.

(11) Export from Export Processing Zones. ± The units operating in Export Processing Zones may export goods abroad as well as to

the tariff area in accordance with the rules and procedures prescribed by the Customs

Export Processing Zones Rules, 1981.

(12) Exports from Gwadar Special Economic Zone. ± Export of goods from Gawadar Special Economic Zone to foreign countries and to the

tariff area shall be in accordance with the rules and procedures to be notified by the

Federal Government.

(13) Breach of the Act.-

Any export made without compliance with the requirements of this Order or made on the

basis of false or incorrect particulars shall be treated as breach of the provisions of the

Act.

(14) Repeal. As the new export policy is issued, The Export Policy Order, 2008 is

hereby cancelled.



SUGGESTIONS FOR TR ADE POLICY

Our democratic Govt announced Trade policy. It seems they didn¶t consider the protest of

textile units and other exporters while finalized it. Right after its announcement Govt

ministers started praising it though most of them don¶t know what a trade policy is? Here

we discuss its highlights:

1-EXPORT TARGET IS USD22.10 BILLION WHICH

REPRESENTS GROWTH OF 15% OVER LAST YEAR

How Govt is going to achieve this target when:

A- Textiles units are being closed due to energy crises and because of waivers of

subsidies

B- There is no subsidy for surgical item manufacturers and exporters

C- Agricultural exports will be very less because of water shortage and local demand

D- No subsidy given to live stock so the meat and dairy product exports can be

enhanced

E- No SOLID benefit announced for pharmacy exporters

F- International markets are going tough on Pakistani exports day by day as British

anti-dumping duty and other barriers

G- Foreign direct investment is decreasing day by day moreover current capital is

going out of country. Many international orders like ADIDAS, NIKE,

QUICKSILVER, CUBA, SODI REP, VISION ITALIA already have gone to

Bangladesh, china and Malaysia. So how this target will be met?

H- American economy is on slower pace so the knitwear exports are decreasing

rapidly; moreover Denim exports are being short

2-TR ADE DEFICIT WILL BE DECREASED BY DECREASE

IN IMPORT:



Our local products are more costly than imported one (especially from china) so how this

import will be minimized? Moreover, Oil is one of the main import of Pakistan, how

govt will pack this Gin into a bottle? Though Govt has announced import of 8000 CNG

bases but that will also a huge import that will lead to an increased import bill.

3-IMPORT OF MACHINARY, EQUIPMENT AND BOOKSFROM INDIA IS ALLOWED

Indian market is far larger than our market and we have very rare exports to India such as

minerals, textile and decoration but they huge range to fill our market. Ch Ahmed

Mukhtar has given a signal to give status of MFN to India. How he will restrict India to

stuff our market from its cheaper goods? This will increase our imports drastically and it

will cause more depreciation in our currency.

4-NO SUB

SIDY WILLB

E GIVEN TO TEXTILE SECTOR Textile sector which is already suffering with high costs of energy and power, Govt has

withdrawn subsidies which will increase their production cost. Few days back I visited a

textile mill in FSD, they were spending 4 karor rupees a month to buy diesel in order to

run their generators for electricity. How can they meet the markets like India, china,

Malaysia, Bangladesh???

5-EXPORT SAMPLE VALUE HAS BEEN ICNREASED

UPTO 5000 DOLLARS AND FOR AUTO SECTOR UPTO

50,000 DOLLARS

Thus our all exporters will be sending their products to other countries as sample by

breaking the order into small shipments each worth 5000 dollars. Thus a new door of

corruption will be opened.

ITFE Assignment

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