Infra-Structure of Gujrat

.:: ROAD LINKS::.
The district has a total metalled road-length of 1019 Kilometres. The district is linked with Gujranwala, Jhelum, Mandi Bahauddin districts through metalled roads.

.:: RAIL LINKS ::.
The main Peshawar-Karachi railway line passes through Gujrat district. The district is linked with Jhelum and Gujranwala districts through railway network

.:: GENERAL QUALITY AND AVAILABILITY OF SUB-SOIL WATER ::.
There is dearth of water in tehsil Kharian. In other tehsils, under ground water resources are adequate. The sub-soil water is generally suitable for industrial purposes.

.:: EFFLUENT DISPOSAL FACILITIES ::.
The two main nullahs in the district are the Bhimber and Bhandar. Halsi, Dulli and Doara are the other known nullahs. Nearly all these natural nullahs are located in North-East portion of the disrict and originate from Azad Kashmir. During rains these nullahs get filled up with hill torrents and extensive areas get flooded. While planning industrial units in their vicinity, this aspect must not be overlooked. The Bhimber, which is the largest of all, used to reach the Chenab in several channels after crossing G.T. Road, but as its course was crossed by the Upper Jhelum canal, the stream has now been turned into a bed of the canal.

.:: POWER SUPPLY ::.
There are 10 grid stations in the district (capacity of 132 KV). Cellular phone services are also available in the district.

. .:: NATUNATURAL GAS AVAILABILITY ::.
Natural gas is available in Gujrat city and towns of Jalalpur Jattan, Lala Musa, Sarai Alamgir, Kharian Cantt; Shadiwal and Kharian

.:: TELEPHONE FACILITIES ::.
There are 43 telephone exchanges operating in the district (ranging in capacity from 200 lines to 8000 lines). Cellular phone services are available in the district.

.::SOCIAL INFRA-STRUCTURAL FACILITIES ::.
Social infra-structural facilities (Public Sector) available in the district are given in Table – 8 on Tehsil – Wise basis.

.:: SOCIAL INFRA STRUCTURAL FACILITIES ::.

TEHSIL	Primary / Middle / High School	college	HOSPITAL	POLICE STATION	RAILWAY STATIONS	POST OFFICE	BANKS
Gujrat	850	9	8	9	4	141	74
Kharian	578	4	4	6	10	138	62
Sarai Alamgir	161	2	1	1	3	36	19

.:: INDUSTRIAL ESTATE ::.

At present one Small Industrial Estate is functioning under the management of Punjab Small Industries Corporation. The overall position regarding plots in the Estate is given in Table:-

SIZES AND AVAILABILITY OF PLOTSIN THE INDUSTRIAL ESTATE

Name of Industrial Estate	Size of Plots	Total No. of Plots	Allotted Plots	Vacant Plots
Small Industrial Estate Gujrat	4 Kanals	85	85	Nil
	2 Kanals	112	112	Nil
	1 Kanals	201	201	Nil

.:: INDUSTRIAL POLICY ::.

Foreign investors are permitted to hold 100% of the equity of industrial projects without any permission of the Government.
·        No prior Government sanction is required for establishment of an industry outside Ex-Municipal Territorial Limit of Town Committee / Municipal Corporation irrespective of its cost and size except the following:-
a. Arms & Ammunition.
b. Security Printing Currency & Mint.
c. High Explosives.
d. Radio Active Substances.
e. Alcoholic Beverages or Liquors.
f. Cotton Ginning Industry.
g. Flour Mills.
·        No sugar mill shall be set up in the district.
·        No industry shall be established within the territorial limits of Ex-Municipal Corporation, Municipal Committee and Town Committees without prior approval of the Government.
·        NOC from Environment Protection Department, Government of Punjab is required.
·        Tourism has been given the status of industry in accordance with Ministry of Industries & Production Circular No. 1-129/99-INV-IV dated 2^nd August 1999.
·        The Housing and Construction Sector has also been declared as industry (Finance Division Notification No. 10(10)/IF-II/98, dated 07.4.1999 and 4.6.1999.
·        In accordance with Government notification No. 3(2)/97-INV-IV dated 05.5.1997, Computer Software and Information Technology (IT) have been declared as Industry

.:: INCENTIVES ::.

According to the latest investment policy of the Government, major existing tariff and fiscal incentives for manufacturing sector are as follows

-	Maximum Tariff Rate:	30%
-	Number of Slabs:	4 (Four)
-	With Rates of:	5%, 10%, 20%, 30%
-	Imported Plant & Machinery (Not Manufactured locally): SRO358(1)/02, dated 05.6.2002.	10%
-	Machinery (not manufactured locally) imported by engineering units for export related production:	Zero rate export value during proceeding financial year.
-	Import of certain machines and tools covered under SRO358(1)/02, dated 05.6.2002:	Duty free
-	For gems and jewellery manufacturers / exporters:	Zero
-	Machinery (not manufactured locally) imported by Export Oriented Units:	Zero Rated
-	Raw materials used in production for Export:	Zero Rated
-	The import tariff on agriculture machinery (not manufactured locally) as per list of specific machinery and equipment for this purpose has been notified vide SRO No. 358(I)/02 dated 15.6.2002:	Zero Rated
-	Custom duty on import of machinery & equipment used in the field of IT:	Exempted
-	Imported duty on computers software and other items related to IT:	Zero Rated

.:: INDIRECT TAXES ::.

-	Custom Duties	10% to 25% (except Automobile)
-	Sales Tax:	15% to 18%
-	Central Excise Duty:	5% to 90%
-	EOBI	5%
-	Social Security:	7% upto Rs. 3000/- or if salary exceeds Rs. 3000/- Rs. 210/-
-	Education Cess:	Rs. 100/- per worker
-	Capital Gain Tax:	Variable
-	Electricity Duty	Rs. 360/- on industrial Rs. 720 on Consumer if bill exceeds Rs. 5000/-
-	Stamp Duty:	o Fifty Paisa for every Rs. 100/- or part thereof of the amount of bill of entry. o Fifty paisa for every Rs. 100/- or part thereof of the amount of letter of credit.

FISCAL

.:: Normal Tax Rate ::.

	Corporate Tax Rate	Assessment 2003-2004
-	Public Companies:	35%
-	Other Companies:	43%
-	Banking Companies:	47%

.:: Personal Income Tax Rates ::.

-	Up to Rs. 80,000:	No Tax
-	Rs. 80,001 to Rs. 150,000:	7.5% of Income
-	Rs.150,001 to 300,000:	Rs. 6,750 + 12.5% of excess over Rs. 150,000
-	Rs. 300,001to Rs. 400,000:	Rs. 25,500 + 25% of excess over Rs. 300,000
-	Rs. 400,001 to Rs. 700,000:	Rs. 40,500 + 30% of excess over Rs. 400,000
-	Over Rs. 700,000:	Rs. 120,000 + 35% of excess over Rs. 700,000

.:: Depreciation Allowance (Schedule-III) ::.

a) Depreciation Allowance (DA) on Plant & Machinery @ 10% on written down value
b) DA @ 5% is available on office building & 10% on factory building
c) The rate of initial allowance under section 23 shall be 50%.
d) The rate of amortization of pre-commencement expenditure under section 25 shall be 20%.

.:: Initial Depreciation Allowance ::.

Under the provision of sub-section (5) of section 23 of the New Ordinance, Initial Depreciation Allowance at the rate of 5% is permissible on an “eligible depreciable asset” placed into service in Pakistan for the first time in a tax year. For the purpose of such allowance “ eligible depreciable asset” means plant and machinery excluding the following: -

a)         Any road transport vehicle unless the vehicle is plying for hire.
b)        Any furniture, including fittings.
c)        Any plant or machinery that is acquired second hand.

d) Any plant or machinery in relation to which a deduction has been allowed under another section of this Ordinance for the entire cost of the assets in the tax year in which the asset is required.
It should be noted that the classes of allowances by way of “First Year Allowance (FYA)”, “Reinvestment Allowance (RA)” and “Industrial Building Allowance (IBA)” as were introduced through the Finance Act, 1998, at varying rate ranging from 20% to 80% have now been withdrawn under the New Ordinance

.:: Fiscal Incentives for Capital Market ::.

-	Capital gains Tax:	Exempted up to June 2004
-	Tax on Bonus Shares:	Exempted
-	Turnover Tax on Trading Stock / Shares:	Exempted
-	Tax on Foreign Investment in Government and Corporate Fixed Income Securities:	Exempted
-	Individuals, firms and companies, investing in stocks:	Exempted
-	Tax on Mutual Funds and Distribution as Dividend:	Exempted

.:: Transfer of Technology ::.

a) There is no restriction on payment of royalty and / or technical service fees for the manufacturing sector. However, such agreements shall be registered with the State Bank of Pakistan.
b) The payments of royalties and technical service fees to foreign companies will be taxed at 15%. However, reduced rates under the treaties with different countries remain applicable..
c) The payment of franchise, royalty or technical fee in case of non-manufacturing sectors is allowed subject to following conditions :--

- In case of foreign investment in non-manufacturing sectors including food sector, the initial / lump sump fee should not exceed US$ 100,000 irrespective of number of outlets under one franchise.

- A maximum 5% of net sales (excluding 15% Sales Tax) in the food sector may be allowed as franchised fee only for these items which are core items of the franchised and are the specialities of the trade name. The payment of such fees be allowed on monthly basis. No item will be eligible for twice payment of royalty / franchised fee, e.g. soft drinks, etc

- Percentage / amount of fees etc. for other non-manufacturing projects is also be upto the maximum of 5% of net sales (excluding 15% Sales Tax).

- Initial period for which such fees may be allowed to projects in non-manufacturing sectors should not exceed five years. Subsequent extension in time period may be considered provided these projects also make investment in alive upstream projects.

The agreements conforming to above guidelines will be sent by the sponsors to State Bank of Pakistan for its information. However, any relaxation or deviation from the guidelines, will require prior approval of the CabinetCommittee On Investment

.:: INDUSTRIAL FINANCING FACILITIES ::.

Following Financial Institutions in the country are providing various types of fixed investment industrial financing in the foreign and local currency to the industrial sector for establishment of new industrial units as well as for Expansion, Balancing, Modernization and Replacement (BMR) of existing industrial units within the frame-work of industrial/financial policies of the Government of Pakistan

i) Agricultural Development Bank of Pakistan (ADBP).

ii) Allied Bank of Pakistan Limited (ABP).

iii) Habib Bank Limited (HBL).

iv) Industrial Development Bank of Pakistan (IDBP).

v) Muslim Commercial Bank (MCB).

vi) National Bank of Pakistan (NBP).

vii) Pakistan Industrial Credit & Investment Corporation (PICIC).

viii) Pak-Libya Holding Company (PLHC).

ix) Pak-Kuwait Investment Company (PKIC).

x) Saudi-Pak Industrial & Agricultural Investment Company (SAPICO).

xi) Askari Commercial Bank.

xii) United Bank Limited (UBL).

xiii) PICIC Commercial Bank.

xiv) Alflah Bank.

xv) Union Bank.

xvi) SME Bank Ltd.

xvii) Soneri Bank Ltd

Besides the financial institutions mentioned above a number of Leasing Companies, Modaraba Companies, Private Investment Banks are also providing financing facilities to the industrial sector. Punjab Small Industries Corporation has launched a Soft Loan Credit Scheme to provide credit to Small Industrial Sector. The main priority sectors will be as under:-

· Service Industries

· Agro / Agro Support Industries

· Food Processing Industries

· Export Oriented Industries

· Import Substitution Industries

· Information Technology (IT) Projects

· Handy-Crafts Industry

· Women Enterprises

The maximum loan limit will be up to three (3) million with debt equity ratio 60 : 40 for new units and 50 : 50 for existing projects. The mark up ratio will be 8% for new projects, 9% for BMR/Expansion and 12% for working capital loans. The repayment period will be 6 years for new projects, 5 years for BMR/Expansion and one year for working capital including grace period as detailed below

·	New Projects:	One year / 1½ year from the date of disbursement of last instalment / first instalment which ever is earlier.
·	BMR/Expansion:	Six months / one year from the date of disbursement of last instalment / first instalment which ever is earlier.
·	Working Capital:	Two months from the date of disbursement.

In order to promote the traditional crafts in Punjab the PSIC is also launching a Soft Loan Scheme to provide loan upto Rs. 40,000/- at the mark up rate of 7% per annum with repayment period of two years including a grace period of 4 months to individuals / units with fixed investment upto Rs. 2 lac. 50% beneficiaries would be the women.Other details if any, could be ascertained from the Regional / Local Offices or the Headquarters Office of Punjab Small Industries Corporation, Egerton Road, Lahore.Small & Medium Enterprise Development Authority (SMEDA) has also been established to develop small and medium enterprises in Pakistan through aggressive sector development programs, formulation of policy guidelines for the Government and facilitate the small & medium enterprises by providing a variety of support services

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