The Duty and Tax Remission on Export (DTRE) scheme is creating complications for the exporters of engineering sector, as it does not fully cover the duties and taxes free import of engineering inputs to be consumed in the finished products to be exported.
Secondly, the Central Board of Revenue (CBR) has deputed incompetent customs officials in the field formation, who were unable to effectively deal in the clearance of engineering goods. This resulted in delays in the clearance of goods imported under the DTRE scheme.
The exporters raised these issues being faced by them during a meeting with the CEO Engineering Development Board (EDB), which was convened to discuss problem relating to the scheme. The exporters said the scheme was time-consuming and the CBR staff was not properly trained to meet the special needs of the engineering sector. Another problem was the non-issuance of zero-rated sales tax invoices by their suppliers, they added.
Meanwhile, a statement issued by the EDB said the meeting was told that Pakistan was losing export opportunities because there is no provision of duties and taxes free temporary import of tools and machinery of the engineering sector and subsequent re-export of the finished products under the DTRE scheme. They also mentioned specific cases in the meeting.
They suggested that instead of case-to-case basis the passbook system in vogue in India should be adopted in the country. The issue of input and output ratio was also discussed.
The EDB CEO, in his opening remarks, said the DTRE scheme was not oriented to engineering sector, hence, the industry was facing difficulties. The EDB as a facilitator wants to take up the issue with the CBR so that the industry could increase its exports, he said, calling upon the engineering industry to improve its competitiveness for exports market.
He said the EDB has planned to organise a series of seminars for increasing awareness of the industry about the DTRE and financing schemes of the State Bank. The first seminar in this connection will be held in Lahore on September 20.
Later, speaking at a press conference convened to brief on working of PUM, an organisation of Dutch experts, he said the EDB was playing the role of mediator between the industry and the foreign expert so that the local industrialists could benefit from their expertise to enhance competitiveness and productivity.
Leen Hanenberg, who led the PUM officials also addressed the press conference. He said they would provide consultancy, training and develop business with the local industry.
He said that PUM runs a cost-free technical support programme with the assistance of the Government of Netherlands. It introduces new products, technical innovation and effective market approach in developing countries by providing direct and indirect support. PUM also organises training courses in countries where it is active, he added.
"We have been assigning experts to companies in Africa, Asia, Middle East, Latin America and Central and Eastern Europe for the last 25 years. PUM has 4,000 experts who carry out around 2,000 projects per annum. Its Business Link Programme guides entrepreneurs in getting in touch with business people beyond their own frontier," said Leen.
He said PUM has been working in Pakistan since 1990s but suspended its activities in 1999 because of the "political unrest" and restarted working in 2004. The inputs of Dutch senior experts had stimulated many Pak companies in the past to become successful entrepreneurs.
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