AAll Authorized Dealers
In Foreign Exchange,

Dear Sirs,

IMPORTS UNDER FOREIGN PRIVATE LOANS – REALISATION OF IMPORT FEE

Enquiries have been received regarding the stage at which import fee is to be recovered in connection with imports under foreign private loans / suppliers credits obtained by the entrepreneurs for erection / expansion of the Industrial undertakings.

2. It is clarified that in such cases imports can be made after registration of the relevant contracts with the Investment Division, Foreign Exchange Department, State Bank of Pakistan, Central Directorate, and Karachi. Such imports are usually made against letters of credit / letters of guarantee or orders placed with the foreign suppliers. Authorized Dealers are required to ensure that import fee for the full contract value is recovered from the importers at the time of opening of letters of credit or issuance of guarantee. Where issuance of letter of credit / guarantee is not involved, fee will be recovered at the time of effecting the remittance of down payment. However, where no letter of credit / letter of guarantee or down payment is involved, fee will be recovered at the time of placement of order with the overseas suppliers. The import fee recovered from the importers will be deposited in the Government account through Annexure 'A' to F.E. Circular No.31 of 1991 within the prescribed time limit. A copy of the evidence of payment of import fee should be submitted alongwith the application for exchange entitlement certificates.

3. Please bring the above to the notice of your constituents.