Section Code: 0038 - 0042
Board of Investments
INVESTMENT PROMOTION ACT
Chapter 4: Machinery, Raw and Essential Materials
Section 38. Import Duties on Essential Materials
The Board shall have the power to order the Department of Customs to release to the applicant who has confirmed the acceptance of promotion under section 21 or to the promoted person, as the case may be, all machinery, raw or essential materials ordered or imported into the Kingdom and entitled to exemption or reduction of import duties under this Act by treating a bank guarantee issued by a commercial bank in the Kingdom as a cash deposit against the payment of import duties and/or business taxes.
Section 39. Importation of Machinery
In the case where the promoted person is unable to comply with the conditions relating to the import of machinery, or to the exemption or reduction of import duties on machinery prescribed in the promotion certificate and the Board is of the opinion that there are suitable grounds to amend the conditions, the Board shall have the power to make amendments thereto, if such machinery has been imported under the due process of law on customs, the Board may make the amendments retroactive to the date of its import, regardless of whether the import is made before or after the date of enforcement of this Act.
Section 40. Prohibitions on Promoted Person
Within the period prescribed by the Board, which shall not be less than five and not more than fifteen years, the promoted person is prohibited to:
- use the machinery on which he has been granted the exemption or reduction of import duties is granted for any purpose other than that of the promoted activities of the promoted person, or to allow any person to use such machinery;
- move the factory or place of operation to any locality other than that prescribed in the promotion certificate. Such prohibition shall not apply to the case where permission is granted by the Board under section 41.
Section 41. Permission Needs to Move Business
The Board shall have the power to permit a promoted person to mortgage, sell, transfer, lease, use for other purposes, or to allow other persons to use the machinery on which the exemption or reduction of taxes or duties is granted under section 28 or section 29, or to move the factory or place of operation to other locality.
The permission may be made in writing or by amending the promotion certificate; and the conditions and details of such permission may be stipulated therein.
The law on customs tariff shall not apply to the promoted person receiving permission from the Board under the Act unless the Board shall otherwise specify. In such a case, the law on customs tariff shall apply only in so far as it is not contrary thereto or inconsistent therewith.
Section 42. Non-Promoted Person Foreclosing on Mortgage
In the case where a promoted person has mortgaged machinery on which the exemption or reduction of taxes and duties is granted and the mortgagee who is not a promoted person forecloses the mortgage before the expiration of the period prescribed by the Board under section 40, the law on customs tariff shall apply to the mortgagee as if he were the importer who ceases to be entitled to exemption or reduction of taxes and duties on the machinery from the date of transfer.