ISLAMABAD: The Directorate General of Input Output Coefficient Organization (IOCO) shall preferably review all the duty drawback rates of exporters after announcement of annual fiscal budget to incorporate the impact of upward or downward revision of customs duties or imposition of new duties.
The FBR has amended Customs Rules 2001 through SRO.714 (I)/2020 here on Monday to explain the new procedure on processing and sanctioning of duty drawback rates. According to the notification, the exercise shall preferably be completed by August 31 and the Board shall ensure notification of revised rates by September 30, 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 July 31, every year to the Director IOCO, 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.
Director General IOCO may initiate exercise for determination of duty drawback rates on its own motion where it is found that duty drawback rates have not been determined and where already determination rates have changed due to amendments in tariffs.
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 of lOCO 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 in force.
Specifying time frame for payment of duty drawback, the FBR has notified that the duty drawback payment of such claims that are complete in all respects shall be made on 'FIFO basis' taking into account the date of filing of claim.
The FBR said that the duty drawback as may be admissible shall be part of the process of assessment of cargo for export and the amount so admissible to the exporter shall be computed and processed by Customs Computerized System on sale proceeds amount repatriated into the country and Form-E settlement from the commercial bank, FBR added.
About the 'Post drawback audit', the FBR said that comprehensive audit of duty drawback payments transferred directly by the State Bank of Pakistan (SBP) to the account of traders shall be carried out by the PCA. In this regard, comprehensive audit of duty drawback payments shall be carried out by the Directorate General of Post Clearance Audit (PCA) of the Federal Board of Revenue. 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.
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, FBR added.
Copyright Business Recorder, 2020
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