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Schemes covering customs duties and tax refunds: FBR unveils the list of 854 active manufacturers

ISLAMABAD: The Federal Board of Revenue (FBR) has released a list of 854 active manufacturers under various export facilitation programs to extend duty/tax exemption to only registered manufacturer-exporters.

In this regard, the FBR has uploaded the list of active manufacturers under various export facilitation programs on the FBR website.

Manufacturer-exporters can check their active status from the list uploaded by the FBR.

The schemes covered the Export Duties and Taxes Remission Scheme (DTRE); Export Facilitation Scheme, Manufacturing Obligation Scheme and Export Oriented Units (EOU) Scheme.

The list covered manufacturers operating under the DTRE scheme, the Export Facilitation scheme, the Manufacturing Obligation scheme and the Export Oriented Units (EOU) scheme.

Manufacturers, who import duty and tax-exempt inputs and raw materials used in the manufacture of export goods, can check their name against the FBR list.

The breakdown of the RBF data revealed that the number of active manufacturers operating under the DTRE scheme stood at 351; export facilitation program 77; EOU 206 and the number of active manufacturers operating under the manufacturing bond program was 220.

Under the Export Facilitation Program-2021, Manufacturer-Exporters and Commercial Exporters merge all programs into one unified procedure.

The Export Facilitation Program 2021 is expected to reduce the cost of doing business and the cost of tax compliance, improve the ease of doing business, reduce liquidity problems for exporters by eliminating tax refunds sales tax and duty drawback for users of the scheme and attracts more users and will ultimately promote exports.

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Users of this program included exporters (manufacturers with exporters, commercial exporters and indirect exporters), joint export houses, sellers and international contract manufacturers.

No duty or tax will be levied on inputs imported by licensed users and local supplies of inputs to licensed users will be zero-rated. Through this new program, Common Export House will import inputs duty and tax free for later resale to authorized users, especially SMEs.

Under SRO 902(I)/2021, the user of the Export Facilitation Scheme-2021 is permitted to sell up to 20% of the output products made from entry products into the domestic market upon payment duties and taxes payable when filing the application. a goods declaration, which will be valued as if the goods were imported into Pakistan in that state, subject to the satisfaction of the regulatory collector as to the reasons for domestic sale.

The new regime will be available to the following persons subject to authorization to import, store and purchase inputs under these rules and registration in WeBOC or PSW: persons registered in under the Sales Tax Act 1990, as a manufacturer and exporter, who manufacture the value added in the manufacture and export of goods, which shall not be less than ten per cent; manufacturers who act or intend to act as contract sellers of a foreign principal as toll manufacturers; Commercial exporters; persons registered under the Sales Tax Act 1990 as manufacturers and acting as indirect exporters; manufacturers, including manufacturers of engineered goods who intend to supply under international tenders; and Common House of Exports.

Under this regime, the acquisition of input goods without payment of duties and taxes will be granted on the basis of: export results for the last two financial years; and firm export contract.

Exporters have been divided into different categories: (i) Category A: Manufacturers and exporters having exported 60% or more of their total annual production in the last two years. (ii) Category B: Manufacturers/exporters of which less than 60% of the total annual production is exported. (iii) Category C: Indirect exporter, commercial exporters and international contract manufacturers.

Categories B and C have also been divided into sub-categories.

All existing users of any of the export regimes issued under SRO 4500)2001 of 18.06.2001 Chapter XV, DTRE, SRO 327(1)2008 of 29.03.2008, prior to the issuance of these rules, may be classified in categories A and C as the case may be, provided they have a good compliance record. The application for authorization to operate under this regime must be submitted online to the Regulatory Collector.

The online application, together with the approved certificate of analysis, of all existing users of export promotion programs under SRO 450(I) 2001 of 18.06.2001, Chapter XV, DTRE, SRO 327(1)2008 of 29.03.2008, shall be processed by the Regulatory Collector by uploading the approved value of the inputs together with the applicable security instrument details into the WeBOC/PSW system and the IOCO database after ascertaining the profile of applicant’s compliance and the value of inputs corresponding to the applicant’s performance and production capacity, within seven days of its receipt.

Copyright Business Recorder, 2022