The State Bank of Pakistan (SBP) has notified the procedure for providing Drawback of Local Taxes and Levies (Non-Textile) to the exporters of eligible products. As per the procedure, 50 percent of the rate of drawback will be provided to exporters without condition of increment in exports of goods. While, the remaining 50 percent will be provided, if the exporter achieves an increase of 10 percent or more in exports during the financial year 2018-19, as compared to the financial year 2017-18 or exports in financial year 2019-20, as compared to financial year 2018-l9 to in financial year 2020-21, as compared to financial year 2019-20.
Ministry of Commerce & Textile, Commerce Division vide S.R.O. No. 711(I)/2018 dated June 8, 2018 issued an order namely "Local Taxes and Levies Drawback (Non-Textile) Order, 2018" to provide drawback of local taxes and levies collected from exporters of eligible products. Accordingly, on Wednesday the SBP has notified the procedure for implementation and payment of drawback of local taxes and levies (non-textile) to exporters.
The cut-off date for filing claims to the SBP for exports in each financial year will be the 3lst March of the subsequent year and after that no claims will be accepted by the SBP. The Local Taxes and Levies Drawback (Non-Textile) Order, 2017 is hereby repealed with effect from the 1st July, 20l8.
As per procedure, the drawback will be provided for the shipments made from the 1st July, 2018 till the 30th June, 2021 and 50 percent of the rate of drawback will be provided without condition of increment in exports of goods.
The actual rate of drawback will be determined on the basis of annual performance of the exporter, but in order to improve his cash flow, the disbursement will be allowed on the performance during July-December of each year, subject to submission of a bank guarantee that the exporters will return the excess amount, in case his annual exports are less than the eligibility criteria already stipulated.
An additional two percent drawback will be allowed for exports to nontraditional markets of the countries already specified relating to Africa, Latin America, non-EU European countries, commonwealth of Independent States and Oceania at the time of submission of claims. The drawback will be provided to exporters on exports of products already specified and the export performance in case of drawback will be analyzed separately by SBP for each category of eligible products.
Exports will be calculated on the basis of shipment date and drawback claims of only those exports will be admissible, proceeds of which have been fully realized as per foreign exchange rules notified by SBP from time to time. However, the date of realization will have no bearing in determining the year in which the transaction shall be accounted for.
In addition, the exporter availing the drawback will be a registered sole proprietor, partnership or a company, having valid NTN and should be a member of respective association or chamber duly registered with the DGTO.
The exporter will be required to furnish data and any information related to its operations, domestic sales, accounts and exports as and when required by the Commerce Division.
As per claim submission process, the exporter will submit claims to the authorized dealer on the form and as per procedure to be prescribed by the SBP.
The authorized dealer will, within two weeks from receipt of the claim and if found in order, scrutinize the claim as per procedure circulated by SBP and submit the claim to SBP along with an undertaking in the prescribed manner for further processing.
Upon receipt of the claim, SBP will scrutinize and release the amount of the claim to the authorized dealer within thirty days by debiting the relevant government head of account for further payment to the exporter.
The authorized dealer will credit the amount of the claim to the exporter within twenty-four hours from receipt of the authorization from SBP; the FBR will provide the SBP access to the electronic data for expeditious verification and scrutiny of claims.
Any exporter or authorized dealer or other person contravenes any provision will be liable for punishment in accordance with the provisions of the Imports and Exports (Control) Act, 1950(XXXIX of 1950), and the rules and orders made there under without prejudice to any other action that may be taken under any other law for the time being in force.
Meanwhile, the state bank has also released the procedure for submission of claims for implementation of Para 1(4)(b) & (c) of Commerce Division's, Local Taxes and Levies Drawback (Non Textile) Order 2017 to the authorized dealers for necessary action and strict compliance.
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