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Meeting On Criteria For Computing The Landed Cost Factor In Terms of SRO 827(I)/2001

SRO 827(I)/2001 provides preference to the local manufacturers of engineering goods in comparison to imported similar goods. Clause 4A (1) of SRO entitles public sector enterprises and corporate entities of proper price comparisons of imported goods with locally manufactured products, in case of “Floating of International Tenders” on FOR basis. Whereas, under Clause 4A (2) of the SRO, in case of those international tenders, where the price is quoted on FOB basis the landed cost factor would be determined by a committee with members from Planning Commission (Financial Analyst), representative from Finance Division and nominee of finance section of the public sector enterprise or corporate entity buying the goods.


EDB invited a meeting of the above committee on 02.11.2021 to review the criteria for landed cost factor to incorporate the impact of infrastructure cess of 1.25% imposed by Sindh Government. Last meeting of the Committee was held on 22.04.2014. Besides the committee the meeting was also attended by the representatives from the Crescent Steel & Allied Products, Sui Southern Gas Company Ltd. (SSGC) and Sui Northern Gas Pipe Line (SNGPL) and after detailed deliberations, a criterion for computation of Landed Cost Factor was revised as under;


Meeting on Criteria for Computing the Landed Cost Factor in Terms of SRO 827(I)/2001



Cost Components for computing landing cost of imported engineering goods in terms of S.R.O 827 (I)/2001 in Pak Rupees
        i. FOB Value
              ii. Sea Freight (Actual quoted by the bidder on the basis of PNSC rates, which shall be announced by the bidder at the time of opening of the bid.
             iii. C&F value (i + ii). (CFR value).
             iv. Insurance @ 1% of C&F Value given at iii above.
              v. CIF (iii+iv).
             vi. Handling Charges @ 1% of CIF Value given at v above.
            vii. Import Value (v + vi) for the purpose of levying Customs Duty.
           viii. Customs Duty at applicable rate, which shall be calculated on the Import value given at vii above.
             ix. Duty Paid Value
              x. Sales Tax at applicable rate, which shall be calculated on the duty paid value given at ix above.
             xi. Duty & Sales Tax paid value (ix + x).
            xii. Withholding Tax at applicable rate, which shall be calculated on duty and sales tax paid value given at xi above.
           xiii. LC Charges @ 0.25% of FOB Value given at i above.
          xiv. Clearing Charges @ 0.25% of C&F Value given at iii above.
           xv. SED at applicable rate, which shall be calculated on the import value given at vii above to be taken as nil as it stands withdrawn.
          xvi. Provincial Infrastructure Cess (at applicable rate) on %age of import value given at vii
         xvii. KPT Wharfage @ Rs.140 per cubic meter or the prevailing rate.
        xviii. Cranage Loading & Other Charges @ 0.25% of C&F Value given at iii above.
          xix. Inland Transportation Charges from Port to Coating Factory (From Port of final destination in case of products other than pipes, where coating is not required).
           xx. Cost of imported engineering goods (xi to xix)
          xxi. LESS: Handling charges taken at S. No. vi. (Notional value taken for calculating assessed value for purpose of calculating custom duty, sales tax and withholding tax by the customs authority).
         xxii. LESS: Sales Tax taken at x above. (Adjustable as output tax)
        xxiii. LESS: With Holding Tax (Adjustable against final assessed tax)
        xxiv. Total deductions (xxi + xxii + xxiii)
         xxv. Net cost of imported engineering goods (xx minus xxiv)


Note: Any other duty / tax/ levy imposed or withdrawn by federal / provincial governments to be incorporated, with the approval of EDB in consultation with the concerned organization(s)

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