Check on flying invoices: Govt mulls revising EFS in budget
The government is reviewing budget proposals to revise the Export Facilitation Scheme (EFS) to curb misuse by commercial importers, aiming to ensure fair competition and boost revenue.
- Proposed withdrawal of sales tax invoice transfer exemption.
- Struggles of documented sectors due to unfair competition.
- Impact of EFS deferment on FBR revenue and steel market.
ISLAMABAD: The government is reviewing a budget proposal to revise the Export Facilitation Scheme (EFS) in the budget (2026-27) to stop commercial importers from massive misuse of flying invoices in local markets.
Sources told Business Recorder that one of the proposals is to withdraw the exemption available to the commercial importers under EFS that allows transfer of their sales tax invoice in the local market.
The documented sectors have also filed budget proposals to remove the exemption given to commercial importers under the EFS.
Leading players of the documented sectors including steel industry who make major contribution of all kinds of duties & taxes to the national exchequer ethically are struggling and are not able to survive due to the ongoing unfair competition between those who are committed to pay taxes and those who evade taxes & duties.
READ MORE: Export Facilitation Scheme be retained in FY26 budget
To ensure fair competition and a level playing field, and above all to increase govt revenue, the proposal is to abolish the exemption given to commercial importers under EFS that allows transfer of their sales tax invoice in the local market to prevent massive misuse of flying invoices under this scheme. This also requires rationalization of S. No. 57, Table-2 of the Sixth Schedule (Exemption Schedule of the Sales Tax Act) for checking misuse of input tax.
The documented sectors have also proposed a reduction in the discount rate from 17.5% to 0% at import stage under this scheme.
The order of Deferment of Value Addition Sales Tax from 17.5% is causing not only huge revenue loss to FBR, but also creating distortion in the steel scrap market by cost differences in the landed cost of the same product in the country. This order is unjustified and unlawful in the eyes of the law and must be corrected immediately.
Among the steel industry, the resolution of these issues of all documented sectors aimed at ensuring a level playing field for the entire spectrum of steel industry.
Copyright Business Recorder, 2026
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