In a bid to streamline export procedures and enhance oversight, the Federal Board of Revenue (FBR) has introduced stringent measures under the Export Facilitation Scheme for new exporters. The move, aimed at ensuring compliance and transparency in export-related activities, entails strict conditions for the procurement of duty and tax-free input goods used in export products.
The FBR’s latest directive, delineated in SRO.456(I)/2024 issued on Friday, entails proposed amendments to the Customs Rules, 2001. Under the revised Export Facilitation Scheme, the FBR has outlined a detailed procedure for new exporters to acquire input goods without payment of duty and taxes.
One of the key provisions of the amended rules pertains to the scrutiny of firm contracts for new exporters without any prior export history. Such applicants are now subject to meticulous evaluation by the Regulatory Collectorate, encompassing aspects like financial viability, production capacity, and a history of local supplies. Moreover, firm contracts exceeding $1 million require mandatory approval from the Chief Collector.
However, for applicants with firm contracts and documented proof of advance payment submitted to the bank, the Regulatory Collector may grant authorization without referral to the Chief Collector, provided detailed scrutiny is conducted.
The amended rules also redefine the term “manufacturer” to encompass any process wherein an article, either individually or in combination with other materials, is transformed into a distinct product capable of being used differently. This broader definition aims to encapsulate all processes integral to the manufacturing of a product, ensuring comprehensive coverage under the Export Facilitation Scheme.
The implementation of these stricter guidelines underscores the FBR’s commitment to fostering integrity and accountability in export activities. By enhancing scrutiny and oversight, the FBR aims to facilitate legitimate exports while curbing any potential misuse or irregularities in the procurement of duty and tax-free input goods.
Overall, these measures align with the government’s broader agenda of promoting a transparent and conducive business environment, thereby bolstering Pakistan’s position in the global export market.