Saturday September 18, 2021

FBR’s new export facilitation scheme to kick-start on Aug 14

August 03, 2021

ISLAMABAD: The Federal Board of Revenue (FBR) on Monday notified rules for new Export Facilitation Scheme (EFS) 2021, effective from August 14, 2021.

The new export facilitation scheme has been approved by the federal government and passed by Parliament under Finance Act 2021. This Scheme would run parallel with existing schemes like manufacturing bond, DTRE and export oriented schemes for two years.

The existing old schemes would be phased out in the next two years, and would be fully replaced by EFS 2021. The rules can be accessed at the official website of the FBR.

Users of this EFS would include exporters (manufacturers cum exporters, commercial exporters, indirect exporters), common export houses, vendors and international toll manufacturers.

Users of this scheme would be subject to authorisation of inputs by the Collector of Customs and Director General Input Output Organization (IOCO). Inputs include all goods (imported or procured locally) for manufacture of goods to be exported.

These include raw materials, spare parts, components, equipment, plant and machinery. No duty and taxes would be levied on inputs imported by the authorised users and local supplies of inputs to the authorized users would be zero-rated. Through this new scheme, Common Export House would import inputs – duty and tax free – for subsequent sale to the authorised users, especially small and medium enterprises. This Scheme has also allowed international toll manufacturing within Pakistan.

Under the said scheme, minimum but necessary documentation and securities based on category and profile of the applicant, user or exporter would be required. This scheme would encourage new entrants and SMEs. This scheme would be completely automated under WeBOC and PSW, where users of the scheme and regulators (IOCO, Regulator Collector, PCA etc) would be integrated through WeBOC and PSW and communicate through these systems.

The focus of the EFS is on post clearance compliance checks and audits. Under this new scheme, authorisation and utilisation period has been enhanced from two years to five years

It is expected that EFS 2021 would reduce 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 EFS. The FBR also hopes this would attract more users and ultimately promote exports.