ISLAMABAD: The Federal Board of Revenue (FBR) has amended the Export Facilitation Scheme (FES), whereas the users would submit a six-monthly reconciliation statement to avoid misuse of incentive-based mechanism to boost exports.
In exercise of the powers conferred by Section 2l9 of the Customs Act, 1969 (lV of 1969), Section 50 of the Sales Tax Act, 1990, Section 40 of the Federal Excise Act, 2005 and Section 237 of the Income Tax Ordinance, 200l (XLIX of200l), the Federal Board of Revenue is pleased to direct that the further amendments would be made to the Customs Rules, 2001.
Minister of State for Finance Bilal Azhar Kiani, in his X post, stated that the Government of Pakistan has increased utilisation period under the Export Facilitation Scheme (EFS) from 9 months to 18 months. This essentially means that exporters can now avail zero duty and import stage taxes for imported inputs, provided that they are used within 18 months. The longer utilisation period will help reduce the cost for country’s exporters and particularly help the SME exporters.
“An additional extension for 6 months, beyond the 18-month utilisation period, will be considered by a committee on a case-to-case basis. A six-monthly reconciliation statement will help safeguard the EFS scheme from abuse,” he added.
He stated that he would like to express his gratitude to colleagues from FBR and the Ministry of Commerce, and to partners from the private sector, including Fawad Anwar (PTC), Khurram Mukhtar (PTEA) and Kamran Arshad (APTMA) for working with him in the Technical Committee which unanimously recommended these policy changes to Prime Minister Shehbaz Sharif. He said he was especially grateful to the PM for approving the committee’s recommendations.
The committee studied and considered historical EFS data and utilisation period benchmarks of regional peers before arriving at its unanimous recommendations. Before this policy change, there were a total of 7,932 Goods Declarations (GDs) of EFS users’ input goods, which had exceeded the allowed 9-month period. After the policy change to 18-month utilisation period, all of these GDs are now again eligible for exports under EFS.
Two additional improvements have also been made:
1. Automatic replenishment of the amount of security deposit to the extent of the amount of goods consumed and exported, which will save exporters time. 2. The EFS users have been given the right to appeal with the chief collector against the orders of the regulatory collector.
