KARACHI: In view of the Prime Minister Package of Incentives for Exporters approved by Economic Coordination Committee (ECC) of the Cabinet in order to provide duty drawback of taxes collected from garments, home textiles, processed fabric, greige fabric and yarn manufacturing cum-exporter units, Government of Pakistan (Textile Division) has notified Duty Drawback of Taxes Order 2017-18.
The Order extends to the whole of Pakistan including exports from Export Processing Zones (EPZ) and duty drawbacks under this Order will be allowed for the shipments made from the July 01, 2017 to June 30, 2018.
According to the order, 50 percent of the rate of drawback will be provided without condition of increment while remaining 50 percent of the rate of drawback will be provided if the exporter achieves an increase of 10 percent or more in exports during performance year (FY 2017-18), as compared to the base year (FY 2016-17).
The actual rate of drawback will be determined on the basis of annual performance of the exporter, but in order to improve cash flow, the disbursement will be allowed on the performance during July-December 2017, subject to submission of a bank guarantee that the exporter will return the excess amount, in case annual exports are less than the amount of drawback paid.
An additional 2.0 percent drawback will be allowed for exports to non-traditional markets i.e. Africa, Latin America, non-EU European countries, Commonwealth of Independent States and Oceania.
The duty drawback will be provided to manufacturing-cum exporting units on export of products under specific Tariff Codes of the Pakistan Customs Tariff.
The export performance in case of drawback will be analyzed separately for each category of eligible products. The units availing the drawback will be registered with the Textile Division and use Textile Division’s online portal.
The unit availing the drawback shall be a registered sole proprietor, partnership or a company, and shall be a member of a textiles association registered with the Directorate of Trade Organizations, Ministry of Commerce & Textile. The units shall furnish data and any information related to its operations, domestic sales, accounts and exports as and when required by the Textile Division.
State Bank of Pakistan (SBP) in consultation with Ministry of Commerce and Textile shall devise mechanism to ensure prompt clearance of drawback claims in compliance of this order.
The units shall file claims for the incentive in the Form as devised by the State Bank of Pakistan and submit to the Authorized Dealer. The Authorized Dealer will scrutinize the claim as per the procedure circulated by the SBP.
Claims found in order would be submitted to the field offices of State Bank of Pakistan — Banking Services Corporations (SBP-BSC) within two weeks after receiving the claim from the unit with an undertaking in the prescribed manner.
The SBP will scrutinize the claims and release the amount of claim to the Authorized Dealers, within 30 days, by debiting the relevant Government head of account. The Finance Division will provide a revolving limit to SBP. The SBP will request for further release of funds to Finance Division once the limit is utilized up to 80 percent. The Authorized Dealers will credit the amount of claim received from SBP within twenty four (24) hours to the unit.
Federal Board of Revenue (FBR) will provide electronic data to SBP for expeditious verification/scrutiny of claims.