Karachi Chamber of Commerce and Industry (KCCI) has suggested that the government should allow refund or input adjustment of sales tax paid on electricity and gas to the Duty and Tax Remission rules for exports (DTRE) approved exporters on the basis of some predefined ratio based on total local and export sales.
In its suggestions for export policy 2004-05, the Chamber noted that under the trade policy 2002-03 ministry of commerce had announced possible changes in DTRE so that this scheme could become more export-friendly. However, there still exists room for improvement in this scheme.
Despite the fact that a number of positive amendments have so far been made there is further need to remove some of the flaws from DTRE rules and they should be streamlined and further simplified.
The chamber has made several suggestions pertaining to improvement in DRTE scheme which include:
1. Under section 297(1) of DTRE, information of each export order is required from the exporter. For large textile units it is very difficult to inform CBR in advance the estimated consumption of raw material, very specially in reference to chemicals and dyes. It is very difficult for textile direct exporters to inform collector of custom about the actual consumption of raw material.
2. The imposition of bank guarantee, irrespective of the category (commercial/ manufacturer) which they are getting DTRE approval seems to be discouraging attitude; therefore, such discretionary power of Collectorate should be abolished.
3. The documentation under DTRE is complex and a cumbersome procedure. Apart from this, presence of auditors and to comply with the statutory requirement requires full time staff for monitoring, recording and reporting of the DTRE.
4. The issue of DTRE approval for specific export contrasts, by collector of exports, should not take more than 10 days as per present rules laid out for DTRE . However, sometimes, the permission takes much more time than 10 days. The chamber suggested that to make the approval process faster, time for approval should be reduced from 10 to 3 working days.
5. The cartage rates from Karachi to Kabul or Kandahar are higher as compared to rates added together for Karachi to Peshawar and then from Peshawar to Kabul or Karachi, Quetta and then from Quetta to Kandahar. The rules should allow DTRE registered exporters to transport their export containers on two different trucks--one from Karachi to Peshawar /Quetta, and other from Peshawar/Quetta to Kabul/Kandahar.
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