All
Authorized Dealers
In Foreign Exchange,
Dear
Sirs,
IMPORTS
ON USANCE BASIS
Attention
of the Authorized Dealers is invited to Para
30-A (i) – Chapter
XIII of the Foreign Exchange Manual (7th
Edition, 1992) in terms of which they can open letters of
credit/register contracts envisaging imports into Pakistan
against payment on usance basis subject to the condition
that such letters of credit/contracts do not stipulate payment
of any amount by way of interest separately and other conditions
laid down therein.
2. It has
now been decided to also permit usance imports on the basis
of letters of credit/contracts envisaging prices quoted
on spot basis and payment of interest separately at a rate
not exceeding the relevant LIBOR + 1.5%. The payment of
interest will be subject to deduction of Pakistan taxes,
if livable. In the cases falling in this category, the overseas
suppliers will draw separate bills of Exchange for the spot
price of the goods shipped and for the interest amount.
The Authorized Dealer will arrange remittance of the amounts
of the Bills on maturity after deduction of the amount of
taxes livable on the interest amount. To this end, the importer
will furnish to the Authorized Dealer a certificate from
the Income Tax Officer showing the amount of tax payable
on the interest amount.
3. As a consequence
of the above, following amendment will be made in the Foreign
Exchange Manual (7th Edition, 1992):-
-
Para
30A(ii) will be renumbered as 30A (iii).
-
Following
will be inserted as Para 30A (ii).
Quote "Usance imports can also be made on the basis
of letters of credit/contracts envisaging prices quoted
on spot basis and payment of interest separately at
a rate not exceeding the relevant LIBOR + 1.5%. The
payment of interest will be subject to deduction of
Pakistan taxes, if livable. In the cases falling under
this category, the suppliers will draw separate Bills
of Exchange for the spot price of the goods shipped
and for the interest amount. The Authorized Dealer will
arrange remittance of the amounts of the Bills on maturity
after deduction of Pakistan taxes livable on the interest
amount. To this end, the importer will furnish to the
Authorized Dealer a certificate from the Income Tax
Officer showing the amount of tax payable on the interest
amount and quadruplicate copy of the receipted challan
showing the deposit of the tax amount in the Government
account. The Authorized Dealers will also maintain a
register for recording details of such transactions
in the following format:-
Sr.
No. |
Name/Address
of the Importers |
L/C
No. & date/Contract No. & dated |
Amount
of L/C/ Contract |
Basis
of Import FOB/C&F |
| 1. |
2. |
3. |
4. |
5. |
| Interest
Rate |
Amount
of interest |
Amount
of tax |
Net
amount of Tax remitted |
Remarks |
| 6. |
7. |
8. |
9. |
10. |
"Unquote.
4. Please bring
the above to the notice of your constituents.
