Customs to sanction duty drawback claims on first in first out basis

KARACHI: The Federal Board of Revenue (FBR) has notified that claims of duty drawback shall be sanctioned by the Customs if the same are complete in all respect and on first in first out basis.

FBR notified amendments in Customs Rules, 2001 vide SRO 561(I)/2020. Accordingly, a comprehensive audit of duty drawback payments shall be carried out by Directorate General of Post Clearance Audit (PCA). Any recovery detected by PCA may be deducted from the next duty drawback claim of the exporter besides initiating recovery proceedings under the recovery rules.

A consolidated discrepancy report shall be send by Collectorate to SBP on monthly basis and SBP shall also send a scroll of all the duty drawback payments made to the exporter.

For calculating amount of customs duties paid at the time of import, past six months import data may be used taking the average quantity or value of each class or description of the materials, including packing materials, from which a particular class or description of goods is ordinarily produced or manufactured. Average exchange rates of the same period may be taken into consideration.

The average amount of customs duties paid on imported materials used in the manufacture of components, intermediate or semi-finished products which are exported as such or further used for manufacture of goods shall be taken into account for the purpose of calculation of the duty drawback.   

The average amount of customs duties paid at the effective rate on the imported input materials shall be calculated for the last six months import data. The average FOB value of each class or description of the goods exported during the last six months may be taken into consideration for the class or description of goods for which export drawback rates are being determined.

 The Directorate General of Input Output Coefficient Organization (IOCO) shall preferably review all the rates notified after announcement of annual fiscal budget to incorporate the impact of upward or downward revision of customs duties or imposition of new duties.

This exercise shall preferably be completed by the 3rd August and the Board shall ensure notification of revised rates by the 30th September, if there are no valid reasons for delay. It shall be the responsibility of all associations and individuals, as the case may be, for whom duty repayment or drawback notifications have been issued to supply, by the 31st day of July every year to the Director, details of any change in the input output worksheets on which the current rates are calculated, in particular, changes in material used, their quantities and values.

However, in case it is found that the inputs have not been properly accounted for or consumed for the manufacture and supply of goods as prescribed, Director IOCO shall communicate the audit findings to the concerned Collector of Customs of the import collectorate who shall initiate proceedings for the recovery of leviable customs-duty and other taxes under the relevant provisions of the law.

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