FBR Approves 20% Sales to be Duty Free for Exporters

The Federal Board of Revenue (FBR) has allowed exporters to make domestic sales up to 20 percent of the goods manufactured from duties and taxes free input/raw materials imported under Export Facilitation Scheme 2021.”

The FBR has issued an SRO.957(I)2021 here on Monday to notify the new “Export Facilitation Scheme 2021″ which will be effective with effect from 14th August 2021.

Users of this Scheme will include Exporters (Manufacturers cum Exporters, Commercial Exporters, Indirect Exporters), Common Export Houses, Vendors, and International Toll Manufacturers. Users of this Scheme shall be subject to the authorization of inputs by the Collector of Customs and Director-General InputOutput Organization (IOCO).


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Under the new scheme, the user 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 the filing of a Goods Declaration, which shall be assessed as if goods are imported into Pakistan in that condition, subject to the satisfaction of the Regulatory Collector regarding reasons for domestic sale.

In case the user is unable to export the output goods and desires to sell output goods exceeding the percentage given in the domestic market, he may sell them in the domestic market subject to payment of duty and taxes on the filing of goods declaration, which shall be assessed if goods are imported in Pakistan in that condition, and subject to the satisfaction of the Regulatory Collector.

In addition, a surcharge at the rate of KIBOR plus 3% per annum shall also be charged on the value of input goods used in the output goods being sold in the domestic market, FBR stated.


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The new scheme would be available to the following persons subject to the authorization 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 percent
  • Manufacturers who act or intend to act as contracted vendors of a foreign principal as toll manufacturers
  • Commercial exporters; persons registered under the Sales Tax Act, 1990, as manufacturers and operating as indirect exporters
  • Manufacturers including manufacturers of engineering goods who intend to supply against international tenders and Common Export House

As per the scheme, the Acquisition of input goods without payment of duty and taxes, under these rules, shall be granted based on export performance for the last two financial years, and firm contract of export.

The applicant can apply for authorization based on both performance and contract basis simultaneously. An applicant having multiple contracts of export may apply for consolidated approval for all such contracts.


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For the Categorization of exporters, the FBR said that the exporters shall be treated as per the f011owing categories:

  1. Category A: Manufacturers-cum-exporters with 60 percent or above exports of their total annual production in the last two years.
  2. Category B: Manufacturers-cum-exporters with less than 60 percent total annual production being exported, this category shall be further subcategorized as under
    Category Bl: Manufacturers-cum-exporters having more than 3 years of export history.
    Category B-2: Manufacturers-cum-exporters having less than 3 years export history.
  3. Category C: Indirect exporter, commercial exporters, and international toll manufacturers
    Category Cl: Manufacturers having more than 3 years history of supplying to direct exporters or export as a commercial exporter or international toll manufacturing;
    Category C2: Manufacturers having less than 3 years history of supplying to direct exporters or export as a commercial exporter or international toll manufacturing.

All existing users of any of export schemes issued under S.R.0 450(1)2001, dated 18.06.2001, Chapter XV, DTRE, S.R.0 327(1)2008, dated 29.03.2008, before issuance of these rules shall be eligible to be classified under the respective category, as the case may be, provided they have a good compliance record, FBR added.


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This Scheme will run parallel with existing schemes like Manufacturing Bond, DTRE, and Export Oriented Schemes for two years. The existing old schemes shall be phased out in the next two years and will be fully replaced by Export Facilitation Scheme-2021. EFS 2021 Rules can be accessed at the official website of FBR.

It is expected that Export Facilitation Scheme 2021 shall 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 Scheme and shall attract more users, and shall ultimately promote exports.



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