FBR considering limiting duty drawback to sales tax registered exporters only

KARACHI: The Federal Board of Revenue (FBR) is considering limiting the availability of duty drawback only to exporters who are registered in Sales Tax.

The Board has received a proposal from the MCC Exports Port Qasim that duty drawback should be available only to such exporters who are registered in Sales Tax, as against to the existing provision that drawbacks are available to all exporters.

MCC Port Qasim in proposals for Budget 2015-16 noted that this would discourage claiming of rebate by blacklisted units. Besides, it will provide some documentary evidences to confirm that goods have been manufactured in Pakistan.

It has also been proposed that drawback should only be admissible on the realized amount. Currently, all the drawback SROs allow drawback either on FOB or weight basis.

It is proposed that every GD filed for export should also be considered as an application for duty drawback. However, processing of the claim will be started on submission of complete claim documents including invoice, packing list, E-Form, BCA etc.

Moreover, on receipt of complete documents, the admissible amount of drawback will be calculated after necessary verification. This will provide the necessary justification for documents as well as the opportunity to seek verification from banks.

MCC Exports Ports Qasim has noted that retention of goods in EPZ for indefinite period is fraught with dangers and is an impediment in monitoring the overall activity of manufacturing units in EPZ. It also provides incentive to investors for less manufacturing because retention of the goods does not attract any penalty.

It is therefore proposed that period of retention of the goods should be the same as in case of bonded manufacturers.

In order to maintain a proper account of the units operating in the EPZ, certain changes have been proposed, which would enable the regulatory collectorate to maintain a proper account of the goods imported by the investor and subsequent exports of the same.

It is proposed that the manufacturers of EPZ will submit to the Collector a quarterly report showing the item wise opening balance, accumulated receiving of input goods and accumulated quantity issued to manufacturing facility, accumulated production of finished goods, factory rejects, waste, accumulated exports and closing balance of finished goods as well as input goods.

It is proposed that at the time of approval of sub-contracting, the regulatory Collector may verify the manufacturing facility of the investor/unit of the tariff area through inspection and determine the production capacity of such units by physical survey.

It has also been proposed that the investors of EPZ would export 80 percent of his goods abroad and 20 percent to the tariff area on payment of duty/tax on the basis of assessed value of goods

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