The Federal Board of Revenue has done well to extend the period of retention of raw material, components and goods, used in the manufacturing of finished products to be exported under the Temporary Importation Scheme, from 12 months to 18 months. This has reference to a Recorder Report, from Islamabad, appearing on Friday.
According to it, the FBR has implemented a major decision of the Trade Policy (2008-2009) to boost exports by amending SRO.1065 through a notification to facilitate exporters. For, as now has been expounded, the Trade Policy envisaged enhancement of the period of retention of raw material and components for export under temporary importation scheme from the current 12 months to 18 months, so as to put it on a par with the provisions of Duty and Tax Remission for Export Scheme (DTRE).
Better late than never, now that the anomaly has been done away with and the manufacturers-cum-exporters have been allowed to retain imported inputs up to 18 months, some of the woes of exporting industries should stand duly taken care of, thereby facilitating smooth flow of exports.
In so far as the time lapse in the implementation of the scheme is concerned, from all available indications, despite the extensive reforms put in place during the last several years the bureaucratic red tape appears to have been very much there, as little seems to have changed in so far as time-consuming procedural formalities are concerned. The FBR has now introduced certain amendments to facilitate the exporters as desired by the Trade Policy.
Ostensibly, as such, to fulfil this obligation, the collectors of customs have been empowered to give six-month extension in such cases, subject to one percent surcharge on cost and freight (C&F) value of the inputs/goods for which extension has been granted.
Small wonder, as has now been explained, under the previous elaborate SRO, it was assumed that the one percent surcharge would be levied on the overall imported goods. However, under the new dispensation it has been explained that one percent surcharge would be applicable on the remaining balance of imported goods only, for which time period extension has been sought by the exporter.
However, the remaining goods which were not being exported within the given time period, would still be liable to one percent surcharge in case of extension in retention period. As such, despite the alteration in phraseology a certain element of ambiguity may appear to be very much there.
For although it has been specified in the notification that FBR can give further extension in exceptional cases, implying that the FBR has been empowered its officials to give extension of unlimited time period. Be that as it may, the fact of the matter is that the extension in the period of retention of imported inputs has provided the much needed relief to exporting industries.
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