In order to be avail the exemption(s) granted in an S.R.O., all requirements specified in an S.R.O. need to be met. As held in a judgment reported in PTCL 2013 CL. 364, exemptions under an S.R.O. are considered contingent exemptions. Once the indemnity bond and the undertaking in connection with the S.R.O. are filed, the beneficiary is required to fulfill all conditions imposed by the S.R.O. Non-fulfillment of any of these conditions would render the beneficiary liable to pay the applicable duties/taxes.
From the standpoint of policy, the basis for tax and customs duties exemptions is public policy aimed at promoting and providing incentives to manufacturing and other industries and trades. As held in a case reported in PTCL 1987 CL 99, one of the objectives of granting such exemptions is that it is awarded as compensation for services rendered in the performance of some function deemed socially desirable or for the benefit of the general public. Therefore, denial of this compensation/benefit to a company could be considered against the spirit of public policy especially if the company cannot comply with the S.R.O.’s requirements due to reasons beyond its control.