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ISLAMABAD: The Federal Board of Revenue has obtained legal backing in line with the Trade Policy to allow duty drawback on the export of goods through a land route to Afghanistan. In this connection, the FBR has amended Customs Rules, 2001 through an SRO1345 (I)/2012 issued here on Monday.
Sources told Business Recorder that the duty drawback is not admissible on the export of goods through land route to Afghanistan. Under the Customs Rules 2001, duty drawback was allowed on "exported goods" which means exported items to any foreign country including Export Processing Zones in Pakistan except Afghanistan via land route and through Afghanistan to Central Asian Republics.
Despite the said legal status under the Customs Rules 2001, the FBR was permitting duty drawback on the export of items through land route to Afghanistan. The practice has been followed in line with the existing Trade Policy which allowed duty drawback on the export of goods through land route to Afghanistan. However, the same provision was not available under the Customs Rules, 2001. An audit objection was raised that how the FBR has been allowing duty drawback facility through land route to Afghanistan when the Customs Rules are not permitting the same.
Now, the FBR has obtained the legal authority to allow such facility in line with the Trade Policy. The Customs Rules 2001 have been amended in line with the Export Policy Order. Through SRO1345(I)/2012, amendment of Customs Rules, 2001 (Warehousing [Manufacturing Bond] Rules), vide which the words "Except" to Afghanistan via land route and through Afghanistan to Central Asian Republics" omitted to allow duty drawback on export of goods to these countries so the Customs Rules have been at par with the existing Trade Policy.
Following is the text of notification issued here on Monday: SRO.1345(I)/2012:- In exercise of the powers conferred by section 219 of the Customs Act, 1969 (IV of 1969), the Federal Board of Revenue is pleased to direct that in the Customs Rules, 2001, the following further amendments shall be made and shall be deemed to have been so made on the 7th day of March, 2002, namely: In the aforesaid Rules, in rule 220, in clause (e), after the word "Pakistan", the words "except to Afghanistan via land route and through Afghanistan to Central Asian Republics" shall be omitted.

Copyright Business Recorder, 2012

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