Pay-As-You-Earn Scheme Act, 1973

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THE PAY-AS-YOU-EARN SCHEME ACT, 1973 
 
 
CONTENTS 
1. Short title and commencement 
2. Definitions 
3.  The Scheme 
4.  Power to make rules 
5.  [Omitted] 
  
 
 
 
 
 
 
 
 
 
 

 
 
 
 
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THE PAY-AS-YOU-EARN SCHEME ACT, 1973 
 
Act No. XXXI of 1973 
 
[9th February, 1973] 
 
An Act to provide for introducing a scheme for the import of machinery and equipment on 
credit for establishing certain industrial units and enterprises 
 
WHEREAS it is expedient to provide for introducing a scheme for the import of machinery 
and equipment on credit for certain industrial units and enterprises; 
 
It is hereby enacted as follows:— 
 
1. Short title and commencement.—(1) This Act may be  called the Pay-As-You-Earn 
Scheme Act, 1973. 
 
(2) It shall come into force at once. 
 
2. Definitions.—In this Act, unless there is anything repugnant in the subject or context,— 
 
(a)       “Prescribed” means prescribed by the Scheme or the rules made under this 
 Act; and 
 
(b)       “Scheme” means the scheme brought into force under section 3. 
 
3. The Scheme.—(1) The Federal Government may p repare and, by noti fication in the  
official  Gazette,  bring into  force a scheme,  to  be known  as the Pay-As-You-Earn Scheme, for 
the import of machinery and equipment on credit for the establishment of an indust rial unit or 
enterprise and requiring that the cost of the machinery or equipment so imported, and such other 
charges in foreign exchange as may be prescribed, shall be met from out of the export earnings of 
such industrial unit or enterprise. 
 
(2) The Scheme may specify, among o ther things, the categories of industrial units or 
enterprises for the establishment of which machinery or equipment may be imported under the  
Scheme, the proportion of export earnings which may be utilized by an industrial unit or enterprise 
for meeting charges in foreign exchange, the procedure for sanctioning of projects and scrutiny of 
list of importable machinery, and the terms and conditions of foreign credits. 
 
4. Power to make rules.—(1) The Federal Government may, by notification in the official 
Gazette, make rules for the administration of the Scheme. 
 
(2) Any rules made under sub-section (1) may provide that an industrial unit or enterprise 
shall,— 
 
(a)       if it fails to repatriate to Pakistan any foreign exchange which it is required by 
 the Scheme to repatriate ; or 
 
 (b)       if the prescribed percentage of its export earnings is not sufficient to meet the 
cost of the machinery and equipment and the other prescribed  charge in 
foreign exchange,  
 
 
 
 
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be liable to pay to the State Bank of Pakistan by way of penalty a sum not exceeding twenty-seven 
per cent, of the value in Pakistan rupees of the amount of foreign exchange it fails to repatriate or, as 
the case may be, of the amount by which its export earnings fall short of the aggregate of the cost 
and charges referred to in clause (b). 
(3) Any amount payable by an industrial unit or enterprise as a penalty under the rules 
made under sub-section (1) shall be recoverable as an arrear of land revenue. 
5. 1 [Omitted]  
 
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         RGN Uploaded on 28.2.2024 
 1Omitted by the Federal Laws (Revision and Declaration) Ordinance, 1981 (XXVII of1981), s. 3 and Sch, II.