Schemes covering duty, tax remission: FBR unveils list of 854 active manufacturers

ISLAMABAD: The Federal Board of Revenue (FBR) has issued a list of 854 active manufacturers under various export facilitation schemes to extend duties/taxes exemption to only registered manufacturers-cum-exporters.

In this connection, the FBR has uploaded the list of active manufacturers under various export facilitation schemes on the FBR’s website.

The manufacturers-cum-exporters can verify their active status from the list uploaded by the FBR.

The schemes covered duty and tax remission for export scheme (DTRE); export facilitation scheme, manufacturing bonds scheme and Export Oriented Unit (EOU) scheme.

The list covered manufacturers operating under the DTRE scheme, export facilitation scheme, manufacturing bonds scheme and Export Oriented Unit (EOU) scheme.

The manufacturers, who import duties and tax-free inputs and raw materials used in the manufacturing of export goods can check their names from the FBR’s list.

Breakup of the FBR data revealed that the number of active manufacturers operating under the DTRE scheme stood at 351; export facilitation scheme 77; EOU 206 and the number of active manufacturers operating under the manufacturing bonds scheme was 220.

Under the Export Facilitation Scheme-2021, the manufacturers-cum-exporters and commercial exporters, merging all schemes into a single unified procedure.

It is expected that the Export Facilitation Scheme 2021 will reduce the cost of doing business and cost of tax compliance, improve ease of doing business, reduce liquidity problems of exporters by eliminating sales tax refunds and duty drawback for the users of the scheme and shall attract more users and shall ultimately promote exports.

FBR impresses, but bigger challenges await

Users of this scheme included exporters (manufacturers cum exporters, commercial exporters and indirect exporters), common export houses, vendors and international toll manufacturers.

No duty and taxes shall be levied on inputs imported by the authorised users and local supplies of inputs to the authorised users shall be zero-rated. Through this new scheme, Common Export House will import inputs duty and tax free for subsequent sale to the authorised users especially SMEs.

Under the SRO 902(I)/2021, the user of the Export Facilitation Scheme-2021 shall be allowed to sell up to 20 percent of the output goods manufactured from input goods in the domestic market on payment of leviable duty and taxes on filing of a Goods Declaration, which shall be assessed as if goods are imported into Pakistan in that condition, subject to satisfaction of the Regulatory Collector regarding reasons for domestic sale.

The new scheme shall be available to the following persons subject to authorisation of import, warehouse and purchase of input goods under these rules and registration in the WeBOC or PSW: Persons registered under the Sales Tax Act, 1990, as manufacturer cum exporter, who make value-addition in the manufacture and export of goods, which shall not be less than ten per cent; manufacturers who act or intend to act as contracted vendors of foreign principal as toll manufacturers; Commercial exporters; persons registered under the Sales Tax Act, 1990, as manufacturer and operating as indirect exporters; manufacturers including manufacturers of engineering goods who intend to supply against international tenders; and Common Export House.

Under the scheme, the acquisition of input goods without payment of duty and taxes shall be granted based on: export performance for the last two financial years; and firm contract of export.

The exporters have been divided into different categories: (i) Category A: Manufacturers cum exporters with 60 percent or above exports of their total annual production in the last two years. (ii) Category B: Manufacturers/exporters with less than 60 percent of total annual production being exported. (iii) Category C: Indirect exporter, commercial exporters, and international toll manufacturers.

The categories B and C have also been divided into subcategories.

All existing users of any of export schemes issued under SRO 4500) 2001 dated 18.06.2001 Chapter XV, DTRE, SRO 327(1)2008 dated 29.03.2008, before issuance of these rules shall be eligible to be classified under Category A and C as the case may be, provided they have a good compliance record. The application for authorisation to operate under this scheme shall be submitted online to the Regulatory Collector.

The online application along with approved Analysis Certificate, of all existing users of export promotion schemes under SRO 450(I) 2001 dated 18.06.2001 Chapter XV, DTRE, SRO 327(1)2008 dated 29.03.2008, shall be processed by the Regulatory Collector by uploading the approved value of the input goods along with the details of the security instrument as applicable in the WeBOC/PSW system and IOCO database after satisfying himself regarding the compliance profile of the applicant and the value of the input goods being commensurate with performance and production capacity of the applicant, within seven days of its receipt.

Copyright Business Recorder, 2022