Under the Export Facilitation Scheme 2021, the Federal Board of Revenue (FBR) has authorised exporters to make domestic sales of up to 20% of items created using duty and tax-free input/raw materials imported.”

On Monday, the FBR released SRO.957(I)2021 to announce the new “Export Facilitation Scheme 2021,” which will take effect on August 14, 2021.
Exporters (Manufacturers cum Exporters, Commercial Exporters, Indirect Exporters), Common Export Houses, Vendors, and International Toll Manufacturers would all be users of this Scheme. 

Under the new scheme, the user will be allowed to sell up to 20% of the output goods manufactured from input goods in the domestic market after paying leviable duty and taxes and filing a Goods Declaration, which will be assessed as if the goods were imported into Pakistan in that condition, subject to the Regulatory Collector’s satisfaction regarding the reasons for domestic sale.

If the user is unable to export the output goods and chooses to sell them in excess of the authorised percentage on the domestic market, he must pay duty and taxes on the goods declaration, which will be assessed if the items are imported in.

In addition, the value of input products utilised in the output goods sold in the domestic market will be subject to a surcharge of KIBOR plus 3% every year, according to the FBR.

The new system would be open to the following individuals, who would need to be approved for import, warehouse, and purchase of input commodities under these criteria, as well as be registered 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

According to the scheme, under these rules, the acquisition of input items without payment of duty and taxes would be authorised based on export performance during the previous two financial years and a firm contract of export.