The Federal Board of Revenue (FBR) has expanded the list of textile items for payment of duty drawback to the exporters with nominal reductions in rates for textile fabrics, garments, engineering, leather, footwear, rubber and sports goods from March 5, 2009.
The board has issued four standard notifications here on Thursday to issue revised duty drawback rates for the exporters. According to the major changes made under the new duty drawback notifications, three new items of textile sector has been included in the SRO. 209(I)/2009. The new items liable to duty drawback are denim fabrics; denim garments and Bamboo blended yarn. The list of the textile items has been expanded for payment of duty drawback rates to the exporters.
Another important feature of the new SRO.211 is that the duty drawback facility has been granted on the export of sanitary fittings and accessories. The repayment of customs duty on the import of raw materials used in the manufacturing of sanitary fittings would be 5.01% of the f.o.b. value. In this regard, a new "Schedule LIV" has been added in the SRO.211.
A detailed comparison of old and new notifications revealed that the FBR has made very nominal reductions in the duty drawback rates for the exporters. In rare cases, the duty drawback rates have been enhanced, but generally most of the rates remained unchanged or minimum reductions have been made to facilitate the export industries.
There was persistent demand of certain exports associations to raise duty drawback rates in view of fluctuation in prices; rupee-dollar parity and rate of duty on the import of raw materials consumed in the export products. However, duty drawback rates remained stagnant in many cases despite issuance of notifications after a lapse of over and above six since announcement of budget 2008-2009. As a result of revision of duty drawback exercise, the comparison of old and new notifications showed that very few major changes have been made in the rates.
Under the amended notifications, the repayment of customs duty would be 0.85 percent of the f.o.b. value on the export of denim fabrics. The duty drawback of 1.35 percent of the f.o.b. value would be applicable on the export of denim garments. The repayment of customs duty would be 0.85 percent of the f.o.b. value on the export of denim fabrics. The repayment of customs duty would be 1.92 percent of the f.o.b. value on the export of Bamboo blended yarn (all blends) made of bamboo fibre and cotton fibre and 100 percent bamboo fibre yarn.
The board has revised duty drawback rates on the export of textile, steel, leather, rubber and sports products in view of tariff rationalisation made in budget 2008-2009. The duty drawback rates have been revised according to the tariff changes made through Pakistan Customs Tariff in the federal budget 2008-09.
Sources said that the contracts of four private sector experts appointed in the Input Output Coefficient Organisation (IOCO), Karachi were not extended in view of policy of the new government. However, the senior officials from customs department had joined IOCO to complete the task. The new IOCO team has revised duty drawback rates taking into account tariff reductions in budget (2008-2009). The board had revised customs duty rates on import of finished products, however, changes relating to the import of raw materials have been accordingly notified under new duty drawback rates. The standard duty drawback notifications have been amended to revise rates.
The FBR has notified revised duty drawback rates for the garments and fabric textile products through S.R.O. 209(I)/2009. Similarly, SRO 210 (i) 2009 has revised the duty drawback rates for the leather and sports goods, SRO 210(I)2009 allowed duty drawback rates for steel products and SRO 212(I)2009 contains revised duty drawback rates for the rubber and plastic products.
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