The Federal Board of Revenue has made 50 percent reduction in the utilisation period of the input goods from two years to one year imported by the exporters for export of the finished products under the Duties and Tax Remission for Export (DTRE) Scheme, causing problems for the business and trade.
Tax experts told Business Recorder here on Thursday that the FBR has taken a measure in budget (2012-13) having direct negative impact on the exporters. Under the DTRE Scheme, the input goods acquired would be utilised in the manufacture and export of output goods within 24 months from the date of approval of DTRE application.
Under the said arrangement available as per DTRE scheme, the whole process of DTRE approval; opening of LC; processing of documents; import of input goods; manufacturing of products and exports took over 1-2 years. It is a time consuming process in view of prevailing law and order situation; energy crises and increased cost of doing business and the period was extended from one year to two years on the demand of the manufactures-cum-exporters in the past.
The utilisation period of input goods was extended from 12 months to two years in view of practical difficulties being faced by the exporters in the past. The FBR has now reduced the time period of the consumption of the input goods imported under the DTRE scheme which may create serious problems for the exporters to ensure export of the finished products within the curtailed period of one year. If the export orders are being canalled or foreign buyers delay their orders, it is practically not possible for the exporters to complete the whole process in one year under the procedure laid down in the DTRE scheme.
Through the SRO601(I)/2012 issued in budget (2012-2013), the FBR has amended the Customs Rules, 2001. Prior to amendment, the customs rules said that the input goods acquired shall be utilised in the manufacture and export of output goods within twenty-four months from the date of approval of DTRE application.
Provided that the said period may be extended by the Board in cases of exceptional circumstances. After amendment in the Customs Rules, 2001 through SRO601(I)/2012, the revised rules said the input goods acquired shall be utilised in the manufacture and export of output goods within 12 months from the date of approval of DTRE application, experts added.
Following is the text of the SRO.601(I)/2012 dated June 1, 2012: S.R.O.601(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 the following further amendments shall be made in the Customs Rules, 2001, namely:
In the aforesaid Rules:
(a) for the letters-PACCS, wherever occurring the words "Customs Computerised System" shall be substituted.
(b) in rule 296, in sub-rule (1), in clause (l), for the words, brackets and letters "Pakistan Customs Computerised System (PACCS)" the words "Customs Computerised System" shall be substituted;
(c) in rule 297, in sub-rule (1), in clause (b), after the word 'industry' the expression "but which shall not be less than 15 percent" shall be inserted; and;
(d) in rule 305, for the words "twenty four" the word "twelve" shall be substituted", it added.