Engineering Development Board

Sector Development Group

DUTY & TAX INCENTIVES FOR MANUFACTURING SECTOR;

Pakistan’s manufacturing sector accounts for 12.79% of GDP and is considered as main contributor of
the Industrial Sector. This sector provides employment opportunities to 16.1% of the total labor force
(Economic Survey 2020-2021). Large Scale Manufacturing contributes 9.37% to GDP and is the
highest contributor to the overall sector, accounting for 76.1% of the manufacturing sector share,
followed by Small Scale Manufacturing and Slaughtering, which contribute 2.12% and 0.94% to the
total GDP respectively (Economic Survey 2020-2021). Growth of the manufacturing sector is
dependent on better availability of utility services, enabling environment, credit to private sector,
Foreign Direct Investment (FDI), capital market gains etc.

Though the outbreak of the COVID-19 pandemic triggered a widespread global shut down halting
major economic activities disrupting supply chains and also affected the Pakistan’s manufacturing
sector, as dependent on imported raw material, however, Government’s thoughtful decisions to resume
the business activities and adoption of smart lockdown boosted the business sentiments and economy
gained traction after witnessing a hefty decline in FY2020. Targeted fiscal and monetary incentives
accompanied by related support packages helped speed up the economic recovery.

Revival of the industrial / manufacturing sector has always been priority of the present Government
and in order to promote the indigenous manufacturing the government has paid focus on “Make-in-
Pakistan” strategy. In this regard, to reduce the cost of manufacturing, rationalization of duties and
taxes were made during the past few years on more than 2500 tariff lines which also included reduction
in CD, RD ACD, ST, FED, and WHT on imported materials, machinery and equipment for
investment and capacity expansion and many other consumer goods not produced in the country. This
momentum also continued in Budget 2021-22 and more duty and tax incentives are extended to many
manufacturing / industrial sectors / products which include; heavy engineering, steel, automotive,
home appliance, chemical, etc.

Besides rationalizing the tax and tariff structure the Government has also been focusing on liberal and
incentivized business environment, ease of doing business & competitiveness, investor facilitation
services, better access to credit and more amenable industrial policy among others etc., through SBP
measures, FTAs/PTAs, GSP Schemes, minimizing procedural requirements, revising Duty Drawback
(DDB) and Drawback on Local Taxes and Levies (DLTL) rates, etc.

EDB, as a technical wing of the Ministry of Industries & Production and custodian of the manufacturing
segment of the industry, especially in Engineering Goods, has been part of all the above mentioned
facilitation activities and is playing its effective role to achieve the objectives related to the revival and
growth of the value added engineering and industrial goods manufacturing sector. EDB has prioritized
the potential sectors which include but not limiting to electrical & power, home appliances, automotive,
cutlery, surgical, house hold utensils, fans, casting & forgings, sanitary fittings and ceramics, and other
export oriented industries, etc and remained in contact and close consultations with the concerned stake-
holders for addressing issues related to local manufacturing, capacity building, capacity enhancement,
1
imports of materials and exports of finished goods, SBP related issues, DDB, DLTL, etc. Several issues
related to State Bank of Pakistan (SBP) which include Export Finance Scheme (EFS), Long Term
Financing Facility (LTFF), Temporary Economic Refinance Facility (TERF), Credit Insurance, etc,
Review of Export Incentive Schemes of FBR, Revision of DDB and DLTL rates, Simplification of
SROs and other Import / Export Notifications, Tax and Tariff structure, and other issues related to
local manufacturing, etc were discussed with the concerned stake-holders and taken up with the
concerned organizations for their rederassal.

As a result, SBP Schemes were reviewed and margins on credits/loans were reduced to support the
manufacturing activity. Specially, TERF was extended on the request of EDB to provide the loans on
import of machinery and equipment for investment and capacity expansion of industrial/engineering
sector. DDB rates in respect of Refrigerators, Deep Freezers, Air Conditioners, Washing Machines,
Microwave Ovens, Transformers, Electric Fans, Tyres, etc.

With regard to DLTL, EDB has revised the existing DLTL list of products and also recommended to
the Ministry of Commerce for revision of DLTL rates specially promoting the export of engineering
goods and extension in the validity of SRO 711(I)/2018 which is ending by June 30, 2021. Further,
EDB, after detailed evaluation and consultation with exporters of engineering goods, has revised Export
Incentive Schemes of FBR and has drafted a consolidated “Export of Engineering Goods Scheme”. The
draft of the Scheme is forwarded to the Ministry for approval at the concerned forum.

In order to facilitate the investment in the emerging and new technologies, EDB, after technical
evaluation, has recommended Greenfield Industry status to many industries including automotive
vehicles, Truck and Bus Radial Tyres, Industrial Fittings, Confectionary products, etc.

Rationalization of duties and tariff structure has been one of the major tasks of EDB and in order to
facilitate and promote the local manufacturing EDB, on regular basis, has been in contact with the
concerned industry and stake-holders for seeking their proposals on tax and tariff related issues. The
proposals received from the concerned industries are evaluated in EDB and consultation with relevant
stake-holders in government as well as in private sector and genuine issues are taken up for resolution
with the concerned offices in FBR, MoC, NTC, etc, through the Ministry of Industries & Production.

As a result of the year 2021-22 activity, several incentives related to CD, ACD, RD, ST/FED & ST have
been extended to the Industrial / Engineering manufacturing sector in Budget 2021-22; in order to;
- remove anomalies in cascading structure of tariff,
- promote and protect domestic industry by introducing targeted interventions,
- enhance import-substitution by rationalizing tariffs on industrial raw materials / intermediate
goods,
- Facilitate export-oriented manufacturing by reviewing the existing exemption regimes & export
schemes

Details of the incentives related to CD, ACD, RD, ST, FED & WHT provided to the manufacturing
sector in Budget 2021-22 on import of inputs and machinery/ equipment are given at Annex-I; whereas,
overall sector wise duty exemptions to the engineering/ industrial goods manufacturers on import of
inputs and machinery, equipment, etc, are provided at Annex-II;

2
 Annex-I

DUTY & TAX EXEMPTIONS PROVIDED IN BUDGET 2021-22

CUSTOMS DUTY (CD)/ADDITIONAL CUSTOMS DUTY (ACD)/

REGULATORY DUTY (RD):
1. In budget 2021-22 Additional Customs Duty (ACD) o n 2436 Tariff L ines (T L s ) o f 20%
C D Slab have been reduced from 7% to 6% which also includes raw materials & intermediary
products used in many engineering/industrial products and other goods; to reduce the cost of
consumer.
2. Rationalization of tariff structure of 992 TLs under First Schedule (Customs Tariff):
- Rationalization of 103 TLs related to Auto Sector (introduction of 850cc Car)-No
change in Duty
- Duty reduction on 827 TLs:
Duty Reduced (2021-22) Duty in 2020-21 Tariff Lines
3% 379 Nos.
0% 11% 73 Nos.
20% 17 Nos.
3% 11% 87 Nos.
16% 116 Nos.
11%
20% 160 Nos.
16% 20% 47 Nos.

[0% items include raw materials of many industries including, Ceramic industry,
Steel Industry, Chemical sector, paints, dyes, automotive sector, home appliances,
pharmaceuticals, Rubber, paper and paperboard products, textile sector, heavy and
medium scale engineering goods, fan sector, motors and pumps, transformers,
automotive batteries, surgical and medical sector, etc.]
- Duty increase to 11% on 1 TL (Motor Spirit-2710.1210) from existing 3%:
- Enhancing scope of concessions on goods falling under Chapter 99 (4 TLs)- No change
in CD
- Creation of New PCT Headings (5 TLs):
CD Rate (%)
PCT Code Description
(2020-21) (2021-22)
- - - Rock salt: 20
25010021 - - - - Himalayan rock salt 20
25010029 - - - - Other 20
39199020 - - - PVC electric insulation tapes in logs 20 16
exceeding 100 cm:
- - - Submersible pumps: 3
84137011 - - - - Submersible pumps having 5 to 10 inches 11
diameters
84137019 - - - - Other 3

1
3. Reduction / Exemption of CD & ACD on raw materials / inputs for;
- Cables / optical fiber manufacturers
- Electronics Manufacturing Industry.
- Boiler manufacturing industry,
- Paint Industry.
- Chemical and Artificial Leather Industry.
- Aseptic plastic packaging manufacturer.
- Footwear industry.
- furniture,
- coating,
- bobbins and cops manufacturing industry
- Poultry industry.
4. Reduction/Rationalization of RD on import of ;
- Mobile Phones to encourage import substitution
- Non-essential / luxury items to support local industry.
- Cocoa paste, butter and powder being industrial input goods.
5. Incentives for the pharmaceutical sector and to keep the prices stable in the market, -
- Exemption of CD & ACD on more than 350 APIs
- Plant, machinery and equipment subject to concessionary rate of 5%
- Exemption of CD & ACD on raw material of auto-disable syringes and Reduction in
tariff on finished auto-disable syringes
6. Reduction / exemption of CD, ACD & RD on import of;
- Goods falling under 589 PCT codes to incentivize the textile industry.
- Flat rolled products of HRC and stainless steel.
7. Reduction / exemption of CD & ACD on import of;
- Uncoated paper and paperboard for printing and graphic arts industry.
- Vaccines for veterinary medicines and feed additives to incentivize the dairy
sector.
- Goods relating to Tourism industry.
- Raw materials and intermediary goods and point of sale machines falling under 328
tariff lines as a consequent of tariff rationalization.
- Inputs of Ready-To-Use Supplementary Foods (RUSF) and Ready-To-Use
Therapeutic Food (RUTF).
- Grain storage hermetic bags and cocoons.
- 06 life-saving drugs
8. Extension in exemption from CD on import of COVID-19 related items for further six
month.
9. Reduction / exemption on inputs / raw materials of food processing industry.
10. Reduction in Duty to 4% on following parts for Hybrid Electric Vehicle under AIDEP: -
1. Battery pack and its parts:
(i) thermistor
(ii) resistor
(iii) capacitor
(iv) bus bar
2. Cooling system for battery packs including blower, tubes, hoses, pump
3. Sensor hybrid vehicle battery voltage

2
 4. Inverter assembly with converter (Power control unit)
5. Electric motor and generator for Transaxle assembly
6. Battery charging system / inlet connectors
7. Hybrid system control unit / hybrid ECU
8. Junction box

11. Reduction in Duty to 3% on following parts for Plug-in Hybrid Electric Vehicle: -
1. Battery pack and its parts:
(i) thermistor
(ii) resistor
(iii) capacitor
(iv) bus bar
2. Cooling system for battery packs including blower, tubes, hoses, pump
3. Sensor hybrid vehicle battery voltage
4. Inverter assembly with converter (Power control unit)
5. Electric motor and generator for Transaxle assembly
6. Battery charging system / inlet connectors
7. Hybrid system control unit / hybrid ECU
8. Junction box
9. Charger
10. Charging port

SALES TAX ACT 1990 & FEDERAL EXCISE ACT 2005:

1) Auto Sector
(i) Exemption on import of CKD kits for Electric Vehicles (EVs) by manufacturers (S.No.
157, Sixth Schedule of Sales Tax Act (STA)).
(ii) 1% ST on locally supply of EVs (Sixth Schedule of STA).
(iii) Exemption from V alue A dded T ax (VAT) and Reduction in ST from 17% to 12.5% on
locally manufactured small cars upto 850c c .
(iv) Withdrawal of VAT on import of EVs (4-wheelers) upto 50 Kwh battery in CKD/CBU
condition and EVs LCV upto 150 kwh batter in CKD/CBU till 30th June, 2026.
(v) Exclusion of EVs 2-3 wheelers and HCVs in CBU condition from the purview of VAT
under Twelfth Schedule till 30th June, 2025.
(vi) Exemption from FED on locally manufactured small cars upto 1000cc.
(vii) Reduction in FED on locally manufactured vehicles, by 2.5% for each category, (S.No.
55B of Table-1, First Schedule to the FEA)
(viii) Reclaimed lead and used lead batteries is an unorganized sector. Therefore, entire amount
of sales tax in respect of sales of such goods is proposed to be withheld at source under
Eleventh Schedule.

2) Telecommunication sector:
(i) Exemption from ST import of plant, machinery, equipment and raw materials
by IT industry under Special Technology Zone Authority (S. No. 161 of Table-1 of
the Sixth Schedule to the STA).
(ii) Deletion of fixed tax i.e. Rs. 250/- per SIM card from Table -I, Ninth Schedule
to STA on SIM cards with effect from 1st July, 2020.
(iii) The rate of FED on telecommunication is proposed to be reduced from 17% to 16%.
3
3) Medical/Health Sector:
(iv) Tax exemption on import of auto disposable syringes and their raw material
(S. No. 159 & 160 of Sixth Schedule of STA ).

4) FATA and PATA

(i) Exemption from levy of FED to the industrial units located in FATA and PATA.
(ii) ST reduced to 16% for goods supplied from erstwhile FATA/PATA to the taxable areas.

5) Misc.
(i) Increase in ST on potassium chlorate from Rs. 80 per kg to Rs. 90 per kg in addition to
17% GST.
(ii) Minimum annual threshold of turnover for cottage industry from all supplies is increased
from Rs. 3 million to Rs. 10 million.
(iii) 100% ST adjustment for Public limited companies ( excluded from the purview of
section 8B of ST Act).
(iv) Exemption on import and zero-rating on local supplies on raw materials, components,
parts and plant and machinery to authorized exporters under Export Facilitation Scheme.

INCOME TAX/WHT:
1. Auto Sector:
(i) Discouraging “on” money on vehicles:
In order to discourage "on" money, additional tax of Rs.50,000 , Rs.100,000 and
Rs.200,000 for vehicles upto 1000 cc, between 1000cc and 2000cc and beyond 2000cc
respectively was imposed where a vehicle is sold within 90 days of its ownership. This
was introduced vide Tax Laws (Amendment) Ordinance, 2021. It was applicable till
30.06.2021. Due to its positive impact, it has been continued. Further, the period of 90
days has been withdrawn. Now the persons buying motor vehicles would be required to
get them registered in their own names otherwise, this tax would be collectable.
(ii) The import of corn harvester & motor vehicles upto 1000 cc, currently subjected to tax
at the rate of 5.5 % on import are exempted from collection of advance income tax at the
import stage (inclusion in Clause (56) of Part IV of the Second Schedule).
(iii) In order to promote documentation and corporatization of used vehicle market this
sector has been granted exemption from withholding tax on the purchase of used vehicle
from general public and reduced minimum turnover tax from 1.5% to 0.25%. (clause
(45B) of Part IV of Second schedule).

2. Telecommunication sector:
(i) Inclusion of telecommunication services in definition of industrial undertaking, enabling
to adjust 1% tax deducted under section 148 on import of capital equipment and plant &
machinery for their own use.
(ii) Reduction of WHT rate under section 153(1) (b) on telecommunication services from
8% to 3% under minimum tax regime.
(iii) Reduction of advance tax under section 236 on internet and mobile phone usage from
12.5% to 10% for tax year 2022 and 8% onwards.

4
3. Special tax regime for manufacturing SMEs.
a. Definition of SME:
As per clause (59A) of section 2 of ITO, 2001, SMEs are defined as manufacturing
enterprises irrespective of their status as an individual, AOP or company having turnover
up to 2 Rs. 250 million and are excluded from the definition of small companies.
b. Legal Framework
Enabling legal provision has been provided in section 100E and Fourteenth Schedule of
the Ordinance. Board has been empowered to prescribe simplified return form for such
SMEs.
c. Rules for Taxability
Fourteenth Schedule of the Ordinance; The SMEs have been divided into two categories
for taxation purposes
(i) Category-I: SMEs having turnover upto Rs. 100 Million would pay tax at 7.5% of
their taxable income
(ii) Category-II: SMEs having turnover exceeding Rs. 100 Million and upto Rs. 250
Million would pay tax at 15% of their taxable income.
Other option to pay tax on turnover basis under final tax regime.
(i) Category-I: SMEs having turnover up to Rs. 100 Million may opt to pay tax at
0.25% of their turnover.
(ii) Category-II: SMEs having turnover exceeding Rs. 100 Million and up to Rs. 250
Million may opt to pay tax at 0.5% of their turnover.
- Provisions of section 113 shall not apply and tax deducted under section 153 shall not be
minimum tax.
- Moreover, tax collectible under section 148 on import of plant & machinery and raw
material shall be adjustable in case of manufacturing SME being industrial undertaking.
- The export proceeds of SMEs shall be taxed at the reduced rate of 0.25% and 0.5% final
tax on the basis of their category.
- The SMEs will be required to obtain reduced rate certificate from concerned
Commissioner.

4. National Power Parks Management Company

(i) Exemption from tax on income from sale of electricity;
(ii) Exemption from minimum tax on turnover basis; and
(iii) Exemption from reversal of tax credits claimed by National Power Parks Management
Company Limited (NPPMCL) which under law become reversible due to change in
ownership or change in debt/ equity ratio.

5. Reduced rate for specified offshore supply contracts

Reduction in WHT from 1.4% to 1% under minimum tax regime to offshore supplies by non-
resident suppliers in the cases of Karot and Kohala hydro power projects situated in AJK.
(Clause (18) of Part III of the Second Schedule to the Ordinance).

6. Minimum tax on turnover:

Previously, minimum tax on turnover at the rate of 1.5% of turnover was payable by all
companies and individuals/ AOPs having turnover exceeding Rs. 10 million. This is an alternative
5
 tax. It is payable when the normal tax liability in cases of exemption, loss, tax credits or for any
other reason, is less than tax payable on turnover basis. It can be carried forward for adjustment
against next year's tax liability however it cannot be carried forward if person has sustained loss
for a year. 4 different types of changes have been made in this regime and are summarized below:
(i) Generalized reduction in minimum turnover tax paid from 1.5% to 1.25%.
(ii) Enhanced threshold for individuals and AOPs from 10 million to 100 million to pay
minimum tax.
(iii) Allowing carrying forward of minimum tax for adjustment against normal tax liability even
in cases of loss to provide relief to businesses sustaining loss and to maximize equity
Division IX of Part I of First schedule has been substituted as below:
S.No. Person(s) Min. Tax as % of the
person's turnover for
the year
(1) (2) (3)
1. (a) Oil marketing companies, Sui Southern Gas 0.75%
Company Limited and Sui Northern Gas Pipelines
Limited (for the cases where annual turnover exceeds
rupees one billion.)
(b) Pakistan International Airlines Corporation; and
(c) Poultry industry including poultry breeding,
broiler production, egg production and poultry feed
production;
2. (a) Oil refineries 0.5%
(b) Motorcycle dealers registered under the Sales Tax
Act, 1990
3. (a) Distributors of pharmaceutical products, fast 0.25%
moving consumer goods and cigarettes;
(b) Petroleum agents and distributors who are
registered under the Sales Tax Act, 1990;
(c) Rice mills and dealers;
(d) Tier-1 retailers of fast moving consumer goods
who are integrated with Board or its computerized
system for real time reporting of sales and receipts; (e)
Person's turnover from supplies through
e commerce including from running an online
marketplace as defined in clause (38B) of section 2.
(f) Persons engaged in the sale and purchase of used
vehicles
(g) Flour mills
4. In all other cases 1.25%

7. Export of services
In order to promote export of services in all sectors of economy, a special regime at par with
export of goods regime has been introduced through insertion of section 154A. The service
providers would be subjected to 1% WHT on their export proceeds. This would be final tax.

6
 (Division IVA of Part III of First Schedule)

8. WHT on electricity consumption.

Reduction in threshold of monthly electricity bill for W H T on electricity consumption from
75,000 to 25,000 from domestic users not appearing on Active Taxpayers’ list.

9. Income of builders and developers in excess of 10 times tax paid

Builders and developers have been provided fixed tax regime and immunity from probe for
sources of investment subject to conditions and limitations provided in section 100D and
Eleventh schedule of the Ordinance. They have been further allowed to incorporate profits from
such projects equal to 10 times of the taxes paid under fixed tax regime. The income in excess of
10 times was chargeable to tax at the normal applicable rates Now changes have been introduced
in Eleventh schedule to the effect that the income of builders and developers from such project
in excess of 10 times of tax paid shall be chargeable at reduced rate of 20%.

10. Special Economic Zones

Special Economic Zones also include some key projects of CPEC. These zones are governed
under Special Economic Zones Act, 2012. The law provides for exemption from income to the
zone developers, co-developers and the zone enterprises for a period of 10 years from the
commencement of business. However, they were liable to pay minimum tax on their turnover at
the rate of 1.5% of turnover. This was causing hardship to the investors. SEZ enterprises have
been exempted from minimum tax for tax year 2021 and onwards. The exemption has been
provided by including SEZ enterprises in clause (I 1A) of Part IV of Second Schedule.

11. Special Technology Zone

The Special Technology Zones Ordinance, 2020 was promulgated to promote innovation,
technology, entrepreneurship and to attract investment in technology driven industries and
enterprises. Special tax incentives have been granted including:
(a) Ten year tax exemption for Special Technology Zone Authority, Zone Developers and Zone
Enterprises by introducing new clause (I26EA) in Part I of Second Schedule.
(b) Exemption from minimum tax by inclusion in clause (11A) of Part IV of Second Schedule.
(c) Tax exemption on the import of capital goods.
(d) Tax exemption on dividend income of private funds from investment in zone enterprises.

12. Women enterprises

Any AOP having all women partners and a company having all women shareholders have been
granted 25% tax reduction in tax liability in a year. (Clause (19) in Part III of second
schedule).

13. Exemption from tax on import

Import of books and silage making machines, subjected to tax at the rate of 5.5 % on import
have been exempted from collection of advance income tax at the import stage. (inclusion in
Clause (56) of Part IV of the Second Schedule).

14. Exemption to Baggase fired power generating units

Following concessions have been provided for Bagasse fired power generation units.
7
 a) Exemption to income from tax - clause (132C), Part I, Second Schedule.
b) Reduced rate of tax of 7.5% on Dividend income from such projects - clause (18C), Part II,
Second Schedule.
c) Exemption from minimum tax on turnover basis — clause (11A), Part IV, Second Schedule.
d) Exemption to baggase fired power generation units on import of plant and machinery under
section 148 - clause (56), Part-IV, of Second Schedule.

15. Conditional concessionary rate for supply chain below importers and manufacturer for
ATL taxpayers;
Certain distributors, dealers, sub-dealers, wholesalers and retailers subjected to WHT @ 4.5% on
supply of goods and minimum turnover tax @ 1.5% are incentivized by reduced rate of 0.25%
under sections 153(1)(a) and section 113 under clauses (24C) and (24D) of Part II of the second
schedule subject to the condition that beneficiaries appear on Active Taxpayers' List of Income
Tax and Sales Tax and are integrate with Board's Point of Sale real time reporting system as Tier-
1 retailers.

16. International Buying Houses

International buying house act as facilitator for exports from Pakistan to their principals abroad.
In order to reduce disputes the amount remitted in foreign exchange to meet the expense of
these buying houses by their principals has been exempted from tax. Moreover, the salary of
non-resident foreign experts employed/ engaged by international buying houses has been
exempted from tax if such experts perform duties for these 20 international buying houses.
(clause (149) of Part I of the Second Schedule).

17. Tax credit for point of sale (POS) machines

In order to encourage integration with point of sale real time reporting system of FBR, tax credit
for POS machines has been introduced through introduction of new section 64D. Tax credit of
Rs.150, 000 or the cost of the machine whichever is lower shall be extended to the Tier 1
retailers installing and integrating machines with Board's system.

18. Assistance in recovery on the request of foreign jurisdictions

Pakistan is signatory to many international bilateral and multilateral tax treaties and agreements.
However, the law did not provide legal cover to recovery of taxes on the request of foreign
jurisdiction. In order to cater to this, enabling provisions have been introduced by amending
section 107 and introducing new section146C of the Ordinance.

19. Reduced Rate of withholding tax for certain services

a) Oilfield services have been included in list of reduced rate services in Division II, Part III of
First Schedule in case of payment to non-residents.
b) Architectural services, oilfield services, telecommunication services, collateral management
services and travel & tour series have been included in list of reduced rate services in
Division III, Part RI of First Schedule.
c) Rates for withholding tax on contracts under section 153(1)(c) have been reduced to 6.5% in
case of companies and 7% in case of others.

20. Delegation of powers of federal government

8
 The powers in respect of taxes, rates of tax and exemptions have been delegated to Board with
the approval of the Federal Minister in charge in pursuant to the decision of the Economic
coordination committee of the Cabinet from time to time (Section 53 of the Ordinance). Powers
in relation to procedures have been delegated to the Board with the approval of the Federal
Minister in charge and necessary changes have been made in sections 2, 99B, 99C, 114 and 204
of the Ordinance.

ISLAMABAD CAPITAL TERRITORY (TAX ON SERVICES) ORDINANCE,

2001
In order to promote and encourage IT sector, it is proposed that export of services may be zero-
rated.

9
 Annex-II
Product/sector wise Exemptions for Manufacturers
# Sector Product Input Material Details HS Code CD (%) Reference
1 Home Appliances,
Air Conditioners (i) Refrigerant gas R-290 (propane) 2711.1200 0% Fifth Sch. Part-III, # 116

Refrigerators (ii) Refrigerant gas Isobutane R-600 gas 2901.1010

Deep Freezers (iii) Refrigerant gas R-410 3824.7800

(iv) Articles of glass 7020.0090
(v) Siver solder 5% 7106.9290
(vi) Stainless steel sheets 7220.2090
(vii) Copper welding rod 7407.2900
(viii) Copper capillary tube 7411.1010
(ix) Copper tube inner grooved 7411.1020
(x) Aluminium sheet stucco 7606.9210
(xi) Filter driers (02 hole/3 hole) 8421.3910
(xii) AC motors, single phase 8501.4090
(xiii) Transformers 8504.3100
(xiv) Magnetic strip 8505.1900
(xv) Magnetrons 8540.7100
(xvi) Glass board for manufacturing TV 8529.9090
panels (LCD, LED, OLED, HDI etc.)

(xvii) Printed circuits 8534.0000

Compressors 8414.3010 0% First Schedule
Evaporators for Air Conditioners 8415.0000 16% First Schedule
Condensors for Air Conditioners 8415.9029 16% First Schedule
Covers for inner body for Air 8415.9030 16% First Schedule
Conditioners
Other Parts of Air Conditioners 8415.9099 20% First Schedule
Evaporators (roll bond / fin / tube on 8418.9910 0% First Schedule
plate types) for Refrigerators

Wire condensers 8418.9920 11% First Schedule

Other parts of Refrigerators / 8418.9990 20% First Schedule
Deepfreezers
Thermostats used in refrigerators, deep- 9032.1010 0% First Schedule
freezers and air-conditioners

2 Electrical Power Goods Sector

LED lights (i). Housing/Shell, shell cover and base Respective 0% Fifth Sch. Part-I, # 23
cap for all kinds of LED Lights and headings
Bulbs
(ii). Pickling preparations for metal 3810.9090 0%
surfaces; soldering brazing or welding
powders and pastes consisting of metal
and other materials

(iii). Poly Butylene Terephthalate 3907.7000 0%

(iv). Bare or Stuffed Metal Clad Printed Respective 0%
Circuit Board (MCPCB) heading
(v). Constant Current Power Supply 8504.4090 0%
for of LED Lights and Bulbs (1-300W)

(vi). Lenses for LED lights and Bulbs 9001.9000 0%

DC Fans Permanent magnets of metal 8505.1100 0% Fifth Sch. Part-III, # 98

(1) Insulation Varnish (Polyurithene / 3208.1010 10% SRO 565(i0/2006, Table,
Polyester / Polyesterimide with Baking S.No. 6
Temperature Ranging from 100C to
220C)

Duty Incentives to Manufacturing Sector 1

 # Sector Product Input Material Details HS Code CD (%) Reference
(2) Composite paper and paperboard 4807.0000 10%
(made by sticking flat layers of paper or
paperboard together with an adhesive),
not surface- coated or impregnated,
whether or not internally reinforced, in
rolls or sheets.

(3) Paper & Paper Board Cellusose 4811.4900 10%

Wadding & Webs of Cullulose Fibers,
Cated, Impregnated Covered Surface

Non Grain Oriented Electrical Steel 7225.1900 0%

Sheet
7226.1900 5%
Electrical Capacitors Raw Materials SRO 565(i0/2006, Table,
S.No. 2
(1) Epoxy Resin 3907.3000 10%
(2) Polyurethane Resin 3907.3000 10%
(3) BOPP Film (Plain capacitor 3920.2010 10%
grade)
(4) BOPP Film (Metalized capacitor 3920.2030 10%
grade)
(5) Polyester / Polypropylene seal 3920.2090 10%
Film
(6) Insulating Paper 4823.9090 10%
(7) Aluminum Foil (99.9 purity 7607.1100 10%
electrolytic grade, plain and etched)
Sub-components & Components
(1) Silicon Rubber Seals 4016.9320 15%
(2) Supporting Kernels 8532.9090 15%
(3) Insulating Cover Sleeve 8546.9000 15%
Transformers Other Electric Conductors exceeding 8544.6090 11% Fifth Sch. Part-I, # 37
32000 V
Grain Oriented Electrical Steel Sheet 7225.1100 0% SRO 565(I)/2006, Table,
S.No. 7
7226.1100 0%
Electric Motors Non Grain Oriented Electrical Steel 7225.1900 5%
Sheet
7226.1900 5%
3 Capital Goods Sector
Boiler Industry (i) Butt welding 7307.9300 3% Fifth Sch. Part-III, # 135

(ii) Iron and alloy steel U- sections of 7216.3110 10%

various heights
7216.3210
7216.3310
(iii) Safety or relieve valves 8481.4000 10%
Compression- ignition for compression ignition internal 8408.9000 3% Fifth Sch. Part-III, # 101
Internal Combustion combustion piston engines (diesel
Piston Engines (Diesel engines of 3 HP to 36 HP)
Engines of 3 HP to 36
HP)
Welding Electrode Of circular cross-section measuring less 7213.9191 10% Fifth Sch. Part-III, # 147
than 7 mm in diameter 7227.9010

4 Telecom Sector
Optical Fiber Cable (i) Cable filling/flooding compound 3824.9999 0% Fifth Sch. Part-III, # 108

(ii) Polybutylene Terephthalate 3916.9000 0%

(iii) Fiber reinforced plastic/glass 3907.7000 0%
reinforced polypropylene
(iv) Polyester rigid film 3920.6310 5%
(v) Weighing more than 150 g/m2 5603.9400 5%
(Nonwovens)
(vi) Water blocking/ swelling tape 5604.9000 0%

Duty Incentives to Manufacturing Sector 2

 # Sector Product Input Material Details HS Code CD (%) Reference
(vii) Gimped yarn, and strip and the like 5606.0000 5%
of heading 54.04 or 54.05, gimped
(other than those of heading 56.05 and
gimped horsehair yarn); chenille yarn
(including flock chenille yarn); loop wale-
yarn

(viii) Backed 7607.2000 5%

(ix) Single/Multimode Optical Fiber 9001.1000 0%

Cellular mobile phones Cellular mobile phones in CKD/SKD 8517.1211 0% Fifth Sch. Part-III, # 101
condition
Plant, machinery and production line Respective 0% Fifth Sch. Part-I, # 23
equipment used for the manufacturing headings
of mobile phones.

SIM and Smart Card (i). Electronic integrated circuits (SIM 8542.3900 0% Fifth Sch. Part-III, # 104
Chip)
(ii). Magnetic sheets 8519.8190
(iii). Glue Tape Lamination for dye 5807.1030
bonding of chip
(iv). Polyvinyl Chloride (PVC) Rigid 3920.4910
Film
(v). Biaxially Oriented Polypropylene 3920.2040
(BOPP) film, laminated

5 Automotive Sector
A) Automotive Parts
Parts for Agricultural Tractors and Prime Movers
Raw materials Respective 1% SRO 655(I)/2006, Table, #
headings 1, 2 & 3
Sub-components/Components Respective 1%
headings
Sub-assemblies Respective 1%
headings
Parts for Buses, LCVs, HCVs and Other Vehicles
Raw materials Respective 1% SRO 655(I)/2006, Table, #
headings 4, 7, 9 & 13
Sub-components/Components Respective 10%
headings
Sub-assemblies Respective 15%
headings
Parts for Cars, 4-Stroke Auto Rickshaw, 3- Wheeler Cargo loader and Motorcycle Rickshaw
Raw materials Respective 1% SRO 655(I)/2006, Table, #
headings 5, 6, 8 & 11
Sub-components/Components Respective 10%
headings
Sub-assemblies Respective 20%
headings
Parts for Motorcycles
Raw materials Respective 1% SRO 655(I)/2006, Table, #
headings 10
Sub-components/Components Respective 10%
headings
Sub-assemblies Respective 13%
headings
B) Vehicle Assembly (TBS Regime)
Other Motor Cars, (Cars, SUVs, Jeeps, Vans, ATVs
i) CKD)- Non-localized parts. Respective 30% SRO 656(I)/2006, Table-I
Headings
ii) CKD- Localized parts. Respective 46% SRO 693(I)/2006, Table
Headings
iii) Tyres/Tubes 4011.1000 16% SRO 656(I)/2006, Table-I

Motorcycles, Motorcycle Rickshaws, Auto Rickshaws & 3-Wheeler Cargo Loaders

i) CKD)- Non-localized parts. Respective 15% SRO 656(I)/2006, Table-I
Headings

Duty Incentives to Manufacturing Sector 3

 # Sector Product Input Material Details HS Code CD (%) Reference
ii) CKD- Localized parts. Respective 46% SRO 693(I)/2006, Table
Headings
iii) Tyres/Tubes for Motorcycles & 4011.4000 20% SRO 656(I)/2006, Table-I
Motorcycle Rickshaws
iv) Tyres/Tubes for Auto Rickshaws & 4011.1000 16% SRO 656(I)/2006, Table-I
3-Wheeler Cargo Loaders

Agriculture tractors
i) CKD)- Non-localized parts. Respective 1% SRO 656(I)/2006, Table-I
Headings
ii) CKD- Localized parts. Respective 36% SRO 693(I)/2006, Table
Headings
iii) Tyres/Tubes 4011.7000 20% SRO 656(I)/2006, Table-I

Prime movers & Buses

i) CKD)- Non-localized parts. Respective 5% SRO 656(I)/2006, Table-I
Headings
ii) CKD- Localized parts. Respective 36% SRO 693(I)/2006, Table
Headings
iii) Tyres/Tubes 4011.2090 3% SRO 656(I)/2006, Table-I

Buses (dedicated LNG/ LPG or CNG)

i) CKD)- Non-localized parts. Respective 1% SRO 656(I)/2006, Table-I
Headings
ii) CKD- Localized parts. Respective 36% SRO 693(I)/2006, Table
Headings
iii) Tyres/Tubes 4011.2090 3% SRO 656(I)/2006, Table-I

Trucks / LCVs
i) CKD)- Non-localized parts. Respective 20% SRO 656(I)/2006, Table-I
Headings
ii) CKD- Localized parts. Respective 46% SRO 693(I)/2006, Table
Headings
iii) Tyres/Tubes 4011.2010 16% SRO 656(I)/2006, Table-I

Trucks / HCVs
i) CKD)- Non-localized parts. Respective 5% SRO 656(I)/2006, Table-I
Headings
ii) CKD- Localized parts. Respective 36% SRO 693(I)/2006, Table
Headings
iii) Tyres/Tubes 4011.2090 3% SRO 656(I)/2006, Table-I

C) Vehicle Assembly (New Make or Model)

Small Cars/Vehicles up to 850cc (New Make or Model)
i) CKD)- Non-localized parts. Respective 15% for new make SRO 656(I)/2006, Table-I
Headings or model for two
years from the date
of issuance of
manufacturing
certificate or upto
30th June 2024,
whichever is earlier

ii) CKD- Localized parts. Respective 15% + 15% for SRO 693(I)/2006, Table
Headings new make or new
model exceeding
200cc for two
years from the date
of issuance of
manufacturing
certificate or up to
the 30th June,
2024, whichever is
earlier.

Duty Incentives to Manufacturing Sector 4

 # Sector Product Input Material Details HS Code CD (%) Reference
iii) Tyres/Tubes 4011.1000 16% SRO 656(I)/2006, Table-I

Motorcycles (New Make or Model)

i) CKD)- Non-localized parts. Respective 10% for new SRO 656(I)/2006, Table-I
Headings entrant for a
period of five
years.
ii) CKD- Localized parts. Respective 10% + 15% for SRO 693(I)/2006, Table
Headings new make or new
model exceeding
125cc for two
years from the date
of issuance of
manufacturing
certificate or up to
the 30th June,
2024, whichever is
earlier.

iii) Tyres/Tubes 4011.4000 20% SRO 656(I)/2006, Table-I

Motorcycles Rickshaw (New Make or Model)

i) CKD)- Non-localized parts. Respective 15% SRO 656(I)/2006, Table-I
Headings
ii) CKD- Localized parts. Respective 15% + 15% for SRO 693(I)/2006, Table
Headings new make or new
model exceeding
200cc for two
years from the date
of issuance of
manufacturing
certificate or up to
the 30th June,
2024, whichever is
earlier.

iii) Tyres/Tubes 4011.4000 20% SRO 656(I)/2006, Table-I

Agriculture tractors (New Make or Model)

i) CKD)- Non-localized parts. Respective 1% SRO 656(I)/2006, Table-I
Headings
ii) CKD- Localized parts. Respective 1% + 15% for new SRO 693(I)/2006, Table
Headings make or model for
two years from the
date of issuance of
manufacturing
certificate or up to
the 30th June,
2024 , whichever is
earlier

iii) Tyres/Tubes 4011.7000 20% SRO 656(I)/2006, Table-I

D) Electrical Vehicles Assembly under SRO 656(I)/2006

1) Electric Auto Rickshaw (8703.8030) for 5-Years from 1st July, 2020
i) EV specific components 1% Fifth Sch. Part-V(A), Table-
II, # 1
(a) Batteries other than lead acid 85.07

(b) Battery Charger 8504.4020

(c) Controller 8542.3100
(d) Electric Motor 8501.3290
(e) Three connection terminal 8504.9090
(f) Converter 8502.4000

Duty Incentives to Manufacturing Sector 5

 # Sector Product Input Material Details HS Code CD (%) Reference
(g) Signal Hook 8504.9090
ii) CKD)- Non-localized parts. Respective 15% SRO 656(I)/2006, Table-I
Headings
iii) CKD- Localized parts. Respective 46% SRO 693(I)/2006, Table
Headings
iv) Tyres/Tubes 4011.1000 16% SRO 656(I)/2006, Table-I

2) 3-Wheeler electric loader (8711.6060) for 5-Years from 1st July, 2020
i) EV specific components 1% Fifth Sch. Part-V(A), Table-
II, # 2
(a) Batteries other than lead acid 85.07
(b) Gear 8483.4019
(c) Electric motor with axle 8501.3290
(d) Controller 8542.3100
(e) Power Switch 8536.5029
(f) Electric auto cut 8504.9090
(g) Battery Connection 8544.4229
(h) Battery Charger 8504.4020
(i) Junction Box 8536.4910
ii) CKD)- Non-localized parts. Respective 15% SRO 656(I)/2006, Table-I
Headings
iii) CKD- Localized parts. Respective 46% SRO 693(I)/2006, Table
Headings
iv) Tyres/Tubes 4011.1000 16% SRO 656(I)/2006, Table-I

3) Electric motorcycle (8711.6040) for 5-Years from 1st July, 2020

i) EV specific components 1% Fifth Sch. Part-V(A), Table-
II, # 3
(a) Electric Motor 8501.3290
(b) Battery Charger 8504.4020
(c) Switches 8536.5029
(d) Junction Box 8536.4910
(e) Controller 8542.3100
(f) Converter 8454.1000
(g) Batteries other than lead acid 85.07
ii) CKD)- Non-localized parts. Respective 15% SRO 656(I)/2006, Table-I
Headings
iii) CKD- Localized parts. Respective 46% SRO 693(I)/2006, Table
Headings
iv) Tyres/Tubes 4011.4000 20% SRO 656(I)/2006, Table-I

4) Electric Buses (PCT code 8702.4090) for 5-Years from 1st July, 2020
i) Components in any kit form (CKD) 8702.4010 1% Fifth Sch. Part-V(A), Table-
II, # 4 / SRO 656(I)/2006,
Table-I

ii) Tyres/Tubes 4011.2090 3% SRO 656(I)/2006, Table-I

5) Electric Trucks (PCT code 8704.9030) for 5-Years from 1st July, 2020
i) Components in any kit form (CKD) 8704.9020 1% Fifth Sch. Part-V(A), Table-
II, # 5 / SRO 656(I)/2006,
Table-I
iii) Tyres/Tubes for Trucks / LCVs 4011.2010 16% SRO 656(I)/2006, Table-I

iii) Tyres/Tubes for Trucks / HCVs 4011.2090 3% SRO 656(I)/2006, Table-I

6) Electric Prime Movers (PCT code 8701.2060) for 5-Years from 1st July, 2020
i) Components in any kit form (CKD) 8701.2050 1% Fifth Sch. Part-V(A), Table-
II, # 6 / SRO 656(I)/2006,
Table-I
ii) Tyres/Tubes 4011.2090 3% SRO 656(I)/2006, Table-I

7) Electric Vehicles 4- wheelers (PCT Code 8703.8090) till 30th June 2026,
i) EV specific components Respective 1% Fifth Sch. Part-V(A), Table-
Headings II, # 7 / / SRO
656(I)/2006, Table-I
ii) CKD)- Non-localized parts. Respective 10% SRO 656(I)/2006, Table-I
Headings

Duty Incentives to Manufacturing Sector 6

 # Sector Product Input Material Details HS Code CD (%) Reference
iii) CKD- Localized parts. Respective 25% SRO 693(I)/2006, Table
Headings
iv) Tyres/Tubes 4011.1000 16% SRO 656(I)/2006, Table-I

8) Hybrid Electric Vehicles

i) HEV specific components Respective 4% Fifth Sch. Part-V(B), # 1 /
1. Battery pack and its parts: Headings / SRO 656(I)/2006, Table-I
(i) thermistor
(ii) resistor
(iii) capacitor
(iv) bus bar
2. Cooling system for battery packs
including blower, tubes, hoses, pump
3. Sensor hybrid vehicle battery voltage
4. Inverter assembly with converter
(Power control unit)
5. Electric motor and generator for
Transaxle assembly
6. Battery charging system / inlet
connectors
7. Hybrid system control unit / hybrid
ECU
8. Junction box

ii) CKD)- Non-localized parts. Respective 30% SRO 656(I)/2006, Table-I

Headings
iii) CKD- Localized parts. Respective 46% SRO 693(I)/2006, Table
Headings
iv) Tyres/Tubes 4011.1000 16% SRO 656(I)/2006, Table-I

9) Plug-in Hybrid Electric Vehicles

i) HEV specific components Respective 3% Fifth Sch. Part-V(B), # 2 /
1. Battery pack and its parts: Headings / SRO 656(I)/2006, Table-I
(i) thermistor
(ii) resistor
(iii) capacitor
(iv) bus bar
2. Cooling system for battery packs
including blower, tubes, hoses, pump
3. Sensor hybrid vehicle battery voltage
4. Inverter assembly with converter
(Power control unit)
5. Electric motor and generator for
Transaxle assembly
6. Battery charging system / inlet
connectors
7. Hybrid system control unit / hybrid
ECU
8. Junction box
9. Charger
10. Charging port

ii) CKD)- Non-localized parts. Respective 30% SRO 656(I)/2006, Table-I

Headings
iii) CKD- Localized parts. Respective 46% SRO 693(I)/2006, Table
Headings
iv) Tyres/Tubes 4011.1000 16% SRO 656(I)/2006, Table-I

E) Manufacturing of EV specific parts, of Electric Auto Rickshaw, 3-Wheeler electric loader and Electric motorcycle und
Inputs for Manufacturing of EV specific Respective 0% Fifth Sch. Part-V(A), Table-
parts, Headings III, # 2
F) Other Incentives for EV manufacturers

Duty Incentives to Manufacturing Sector 7

 # Sector Product Input Material Details HS Code CD (%) Reference
i) Plant and machinery specifically Respective 0% Fifth Sch. Part-V(A), Table-
designed for use in manufacturing of Headings III, # 1
electric vehicles.
(one-time basis for setting up the new
assembly and/ or manufacturing facility
of electric vehicles, and for expansion in
the existing units)

ii) Import of CBU chargers with CKD Respective 1% Fifth Sch. Part-V(A), Table-
kits for electric vehicles Headings III, # 3
G) Import of Electric Vehicles (EV) CBU & their Parts Under Electric Vehicle Policy 2020
Electric auto rickshaw 8703.8030 25% Fifth Sch. Part-V(A), Table-
I
3-Wheeler electric loader 8711.6060 25% Fifth Sch. Part-V(A), Table-
I
Electric motorcycle 8711.6040 25% Fifth Sch. Part-V(A), Table-
I
Electric buses 8702.4090 1% Fifth Sch. Part-V(A), Table-
I
Electric trucks 8704.9030 1% Fifth Sch. Part-V(A), Table-
I
Electric prime movers 8701.2060 1% Fifth Sch. Part-V(A), Table-
I
Electric Vehicles 4- wheelers 8703.8090 12.50% Fifth Sch. Part-V(A), Table-
I

6 Light Engg. Sector

Shaving blades/razors Carbon steel strips of thickness 0.09 to 7226.9200 5% Fifth Sch. Part-III, # 93
0.1 mm and width 22.2 to 22.4 mm

Bicycle chain Bicycle Chain Parts 7315.1990 15% Fifth Sch. Part-III, # 94
manufacturers
Industrial Chain Chain parts 7315.1990 15% Fifth Sch. Part-III, # 138

Aluminum beverage cans (i) Coils of aluminium alloys 7606.1200 0% Fifth Sch. Part-III, # 96

(ii) Aluminum lids 8309.9010 0%

Photo Polymers & CTP (i) Aluminum sheets & Coils 7606.1100 5% Fifth Sch. Part-III, # 114
Plates and Pre- Sensitized
Printing Plate,

7606.9190
7606.9290
(ii ) Aluminum foil 7607.1990
Decorative Printed Decorative base paper 4802.5510 0% Fifth Sch. Part-III, # 132
Industry
Articles of Stationery. Raw Materials SRO 565(i0/2006, Table,
S.No. 3
(1) Potato starch 1108.1300 0%
(2) Acid dyes whether or not 3204.1200 0%
premetallised, and preparations based
thereon; mordant dyes and preparations
based thereon (acid dyes / dyestuff) ),
non- textile grade

(3) Pigments and preparations based 3204.1700 0%

thereon (pigments) ), non-textile grade

(4) Stamping foil 3212.1000 0%

(5) Inks for ball points pens, fine 3215.9010 0%
liners and fibre tips
(6) Edenol 3824.9999 0%
(7) Hardners 3824.9999 0%
(8) Acrylic polymer (fast drying) 3906.9090 0%
(9) Alkyd resins (fast drying) 3907.5000 0%
(10) Amino-resins (fast drying) 3909.3900 0%
(11) Cellulose nitrate 3912.2010 0%

Duty Incentives to Manufacturing Sector 8

 # Sector Product Input Material Details HS Code CD (%) Reference
(12) Carboxyl-methyl cellulose and its 3912.3100 0%
salts (carboxy methyl cellulose)
(13) Porous fibre rods for making 3916.9000 0%
marker nibs
(14) Heat transfer film 4908.9000 0%
(15) Electro galvanized wire 7217.2000 0%
(16) Spring wire 7217.9000 0%
(17) Brass alloy wire 7408.2100 0%
(18) Wood sandwich blocks with lead 9609.9000 0%
encased
Sub-components and Components

(1) Carbon for lead 2803.0090 5%

(2) Steel balls not exceeding 1mm 7326.9040 3%
diameter
(3) Sharpener blades 8214.1000 5%
(4) Synthetic fiber reservoirs of the 9608.6000 5%
kind used in writing instruments (ink
reservoirs)
(5) Nibs made of special metal for 9608.9100 5%
use in manufacture of writing
instruments (fountain pen nibs)
(6) Nibs points( for fiber tip 9608.9100 5%
(7) pens and markers) Tips for fine 9608.9100 5%
liners
(8) Raw cores used for making black 9609.2010 5%
lead
(9) Color lead 9609.9000 5%
Interlining/ Buckram, Other saturated Polyesters 3907.9900 5% Fifth Sch. Part-III, # 121

Metalized Yarn Uncoated Film of Poly (ethylene 3920.6200 11% Fifth Sch. Part-III, # 62
terephthalate)
Aluminium Wire not alloyed 7605.1900 11% Fifth Sch. Part-III, # 95
Hemodialyzers (i) Dextrose 1702.3000 0% Fifth Sch. Part-III, # 112

(ii) Sodium Chloride pharma grade 2501.0090

(iii) Calcium Chloride pharma grade 2827.2000

(iv) Magnesium Chloride Pharma grade 2827.3100

(v) Potassium Chloride 2827.3900

(vi) Sodium bicarbonate pharma grade 2836.3000

(vii) Potassium Chloride pharma grade 3104.2000

Paper sizing agents (i)AKD wax 3809.9200 5% Fifth Sch. Part-III, # 115

(ii)Finishing agent 3809.9200 5%

(iii)Cationic 3402.1290 5%
Film and Yarn from PET. Yarn and film grades 3907.6110 5% Fifth Sch. Part-III, # 123

Decorative Printed Specialized decorative printed papers 4802.5510 0% Fifth Sch. Part-III, # 132
Industry
Manufacture of Aerosol Spray Valves/Pumps with or without 8481.8090 0% Fifth Sch. Part-III, # 133
spray cap/ actuator for aerosol products

7 Renewable Energy Sector

Solar Cell Manufacturing (i). Crystal (Grower) Puller (if machine). 8479.899 0 Fifth Sch. Part-I, # 21(8)
Equipment.

(ii). Diffusion furnace. 8514.3000 0%

(iii). Oven. 8514.3000 0%
(iv). Wafering machine. 8486.1000 0%
(v). Cutting and shaping machines for silicon
8461.9000
ingot. 0%
(vi). Solar grade polysilicon material. 3824.9999 0%
(vii). Phosphene Gas. 2853.9000 0%
(viii). Aluminum and silver paste. Respective 0%
headings

Duty Incentives to Manufacturing Sector 9

 # Sector Product Input Material Details HS Code CD (%) Reference
Lithium- Ion Batteries Lithium Ion Cells 8507.6000 0% Fifth Sch. Part-III, # 143

8 Medical & Health Sector

PPE (VTM) Raw materials Respective 0% Fifth Sch. Part-III, # 145
heading
PPE (N95 Masks) Raw materials Respective 0% Fifth Sch. Part-III, # 145
heading
PPE (Surgical Masks) Raw materials Respective 0% Fifth Sch. Part-III, # 145
heading
PPE (Face Shields) Raw materials Respective 0% Fifth Sch. Part-III, # 145
heading
PPE (Tyvek Suits) Raw materials Respective 0% Fifth Sch. Part-III, # 145
heading
I.V. Canola Raw materials Respective 0% Fifth Sch. Part-III, # 145
heading
Blister Paper 4802.6990 10% Fifth Sch. Part-III, # 69
Disposable/Auto disable Plastic Film (Medical grade) 3920.2040 10% Fifth Sch. Part-III, # 61
syringes
(i) Other 3215.1190 0% Fifth Sch. Part-III, # 125

(ii) Polypropylene 3902.1000 0%

(iii) Propylene copolymers 3902.3000 0%
(iv) Plasticised 3904.2200 0%
(v) Epoxide resins 3907.3000 0%
(vi) Biaxially Oriented Polypropylene 3920.2040 0%
(BOPP) film, laminated

(vii) Other 3921.9090 0%

(viii) Gaskets of rubber 4016.9310 0%
(ix) Printing paper 4802.5510 0%
(x) Tubular metal needles and needles 9018.3200 0%
for sutures
Disposable Syringes and Plasticised (Poly Vinyl Chloride) 3904.2200 0% Fifth Sch. Part-III, # 120
Saline Infusion sets

Pharmaceutical Packaging (i) Aluminum foil rolled but not 7607.1100 0% Fifth Sch. Part-III, # 126
further worked “7 microns to 100
microns”
(ii) Film and sheet of polyamides “ 20 3920.9200 0%
microns to 40 microns”
First Aid Bandages (i) Other 3005.9090 5% Fifth Sch. Part-III, # 127
Manufacturing Industry

(ii) Other 3920.2090 5%

(iii) Other woven fabrics (Dyed) 5407.5200 5%
Hemodialyzers, (i) Dextrose 1702.3000 0% Fifth Sch. Part-III, # 113

(ii) Sodium Chloride pharma grade 2501.0090

(iii) Calcium Chloride pharma grade 2827.2000
(iv) Magnesium Chloride Pharma grade 2827.3100

(v) Potassium Chloride 2827.3900

(vi) Sodium bicarbonate pharma grade 2836.3000
(vii) Potassium Chloride pharma grade 3104.2000

9 Chemical and Plastic Industry

Powder Coatings Chrysotile Asbestos 2524.9000 15% Fifth Sch. Part-III, # 32 &
52
(i) Polyester Resin 3907.9900 10%
(ii) Epoxide resin 3907.3000
Solid Surface Sheet Unsaturated Polyester Resin (UPR) 3907.9100 5% Fifth Sch. Part-III, # 61,
140
(Till 30th June 2022.)
Aluminium Wire not alloyed 7605.1900 11%
Sodium Lauryl Fatty Alcohol Ethoxylate 3402.1300 5% Fifth Sch. Part-III, # 43
Ether Sulphate,
Chemical Industry Ethylene 2901.2100 0% Fifth Sch. Part-III, # 34
Ethylene Dichloride 2903.1500 0% Fifth Sch. Part-III, # 36

Duty Incentives to Manufacturing Sector 10

 # Sector Product Input Material Details HS Code CD (%) Reference
Ethylene glycol (ethanediol) (MEG) 2905.3100 0% Fifth Sch. Part-III, # 37

PTA (i) Para xylene 2902.4300 0% Fifth Sch. Part-III, # 35

(ii) Acetic acid 2915.2100
(iii) Hydrogen Bromide 2811.1990
(iv) Palladium on carbon 3815.1200
Butyl Acetate Organic composite solvents and 3814.0000 5% Fifth Sch. Part-III, # 119
thinners not elsewhere specified or
included; prepared paint or varnish
removers.
Stearic Acid/ Fatty Acid (1) Palm Stearin. 1511.9010 5% SRO 565(i0/2006, Table,
(DFA)Distilled S.No. 4
(2) Inedible Animal Or Vegetable Oil 1518.0000 15%
and Fats
PET. Yarn and film grades 3907.6110 5% Fifth Sch. Part-III, # 123

3907.6910

10 Leather & Rubber Products

Tyres and other Rubber Carbon black other than rubber grade 2803.0020 5% Fifth Sch. Part-III, # 141
Ind.
Shoe manufacturers (i) Shoe adhesives 3506.9110 5% Fifth Sch. Part-III, # 130

(ii) Phenolic resins 3909.4000 5%

(iii)Of polymers of ethylene 3920.1000 5%
(iv)Other 3920.2090 5%
(v)Other 3921.9090 5%
(vi)Shoe lasts 3926.9060 5%
(vii)Uppers and parts thereof, other 6406.1000 5%
than stiffeners
(viii)Outer soles and heels of rubber 6406.2010 15%

(ix)Buckle 8308.9020 5%
(x) Weighing more than 150 g/m2 5603.1400 5%

(xi) Weighing more than 70 g/m2 but not 5603.9300 5%

more than 150 g/m 2
Artificial Leather (i) PVC Emulsion grade (subject to lab 3904.1010 0% Fifth Sch. Part-III, # 131
test.)
(ii) Release paper 4811.5990 3%
Machine made Carpets Woven fabrics obtained from strip and 5407.2000 5% Fifth Sch. Part-III, # 137
the like
Hand-woven Carpets Carpets 5701.1010 0% Fifth Sch. Part-III, # 146

Polyester Staple Fiber PET Scrap 3915.9000 11% Fifth Sch. Part-III, # 134

Diapers/Sanitary Napkins (i) Other 3506.9190 5% Fifth Sch. Part-III, # 111

(ii) Other 3906.9090 5%

(iii) Of polymers of ethylene 3920.1000 16%
(iv) Of other plastics 3921.1900 16%
(v) Of polymers of ethylene 3923.2100 5%
(vi) Weighing not more than 25 g/m2 5603.1100 11%

(vii) Weighing more than 25 g/m2 but 5603.9200 16%

not more than 70 g/m2
(viii) Weighing more than 70 g/m2 but 5603.9300 11%
not more than 150 g/m2

Diapers manufacturers (i). Adhesives based on polymers or 3506.9190 11% Fifth Sch. Part-III, # 44,
rubbers 56, 57, 58, 59, 63, 64
(ii). Hot melt adhesives
Pre-laminated Tape 3919.1090 16%
3920.9900 16%
Frontal Tape 3919.9090 16%
3920.9900 16%
PE + NW laminate sheet 3920.1000 16%
Poly back sheet 3920.1000 16%
Perforated Poly Film 3920.9900 16%

Duty Incentives to Manufacturing Sector 11

 # Sector Product Input Material Details HS Code CD (%) Reference
Waist Band Barrier 3921.9090 16%
Non-wovens, whether or not 5603.1100 11% Fifth Sch. Part-III, # 88
impregnated, coated, covered or
laminated for man-made filaments.
5603.1200
Acquisition layer 5603.9200 11% Fifth Sch. Part-III, # 89
Loop pile fabric 6001.2210 16% Fifth Sch. Part-III, # 90
6001.2290
Bobbins, Cops and (i) Other uncoated paper and 4805.9390 0% Fifth Sch. Part-III, # 136
Cores paperboard
(ii) Vegetable parchment 4806.1000 0%
Aerosol Spray Valves/Pumps with or without 8481.8090 0% Fifth Sch. Part-III, # 133
spray cap/ actuator for aerosol
products

11 Food Processing & Packaging

Aseptic liquid food (i) Other craft paper 4804.3900 15% Fifth Sch. Part-III, # 109
packaging material
(ii) Multi-ply (clay coated paper and 4810.9200
paper board
(iii) Aluminum foil (rolled but not 7607.1100
further worked)
Film of ethylene 3920.1000 15% Fifth Sch. Part-III, # 60
Liquid food packaging Uncoated paper and paperboard 4805.9290 15% Fifth Sch. Part-III, # 70
industry for dairy and
juices
Food Processing Industry (i) Ednozym Pectofruit 3507.9000 3% Fifth Sch. Part-III, # 128

(ii) Endozym Pectofruit PR

(iii) Endozym Alphamyl MG
(iv) Silite Normal Speed, 3824.9999 3%
(v) Silite High Speed and
(vi) Spindasol FJ under
Infant Formula Milk (i) Malt extracts & Food prep 1901.9020 5% Fifth Sch. Part-III, # 112

(ii) Other 1901.9090 5%

(iii) Cans of Iron and steel 7310.2900 10%
Flexible Packaging Specialty paper 40-50 grams having 4810.9900 0% Fifth Sch. Part-III, # 61,
Industry specification of wood free, white, glossy 139
and one side coated for Gravure
Printing Process
Coning Oil, White Oil and Base oil 2710.1993 0% Fifth Sch. Part-III, # 117
Other Textile Oils,

Ready to Use (i) Skimmed milk powder 402.1000 0% Fifth Sch. Part-III, # 122
Supplementary Foods
(RUSF) and Ready-To-
Use Therapeutic Food
(RUTF),
(ii) Whey powder 404.1010
(iii) Peas (Pisum sativum) 713.1000
(iv) Grams (dry whole) 713.2010
(v) Other 713.3990
(vi) Groundnuts shelled weather or not 1202.4200
broken
(vii) Other 1507.9000
(viii) Palm Olein 1511.9030
(ix) Other 1514.9900
(x) Vegetable fats and their fractions 1516.2010

(xi) Other 1517.9000

(xii) Malto dextrins 1702.9030
(xiii) Other 2106.9090
(xiv) Other 3404.9090
(xv) Other 3824.9999

Duty Incentives to Manufacturing Sector 12