ISLAMABAD: The Federal Board of Revenue (FBR) has exempted/reduced customs duty on the import of 580 items of textile sector from July 1, 2021.
According to the FBR’s budget instructions issued the Model Customs Collectorates (MCCs) here on Friday, textile is the single largest earning sector of the country.
It has an overwhelming impact on the economy, contributing more than 60 percent to the country’s export.
The sector covers cotton value chain, polyester value chain, man-made fibers (MMF) as well as natural fibers etc.
Keeping in view the importance of the textile sector, customs duties on goods falling under around 580PCT codes have either been exempted or reduced.
To boost the competitiveness of the footwear industry customs duty on inputs like uppers, buckle, shoe adhesives, phenolic resins etc falling under PCT code 6406.1000, 8308.9020, 3506.9110, 3909.4000, 3920.1000, 3920.2090, 3921.9090 and 3926.9060) has been subject to concessionary rate of 5% and outer soles and heels of rubber (PCT code 6406.2010) has been subject to 15% concessionary rate of customs duty with nil ACD and RD under Fifth Schedule for Sales Tax Registered Shoe Manufacturers subject to quota determination by IOCO; Furthermore, CD and ACD on Master batches (PCT codes 3206.4910), composite paper (PCT code 4807.0000) and Preparation of a kind used in the leather or like industry (PCT code 3403.1110) has been reduced from 20% and 7% to 16% & 4% and CD on Sealing waxes (3404.9010) and Vinyl Chloride-vinyl Acetate Copolymers (PCT code 3904.3000) may be reduced from 11% to 3% in Pakistan Customs Tariff.
To incentivize poultry industry customs duty on medicaments (PCT code 3004.9099) has been reduced from 11% to 3% under Fifth Schedule and Additional Customs duty on import of all animal feed preparations/additives (PCT code 2309.9000) already listed at serial No. 20 to 30 of Part-III of Fifth Schedule has been exempted.
In order to cater for the needs of the export sector, including small and medium enterprises, FBR has drafted a new and simplified Export Facilitation Scheme.
To enable FBR to launch this Scheme, an amending clause i.e.” imports by persons as authorized under Export Facilitation Schemes, 2021 notified by the Federal Board of Revenue with such conditions, limitations, restrictions” has been made in PCT code 9917.
After implementation of the new scheme, the existing schemes shall be phased out in next two years.
Users of the new scheme will be allowed to import inputs, raw materials, components, equipment, plant and machinery without payment of Customs Duty, Sales Tax, FED and IT Withholding Tax.
Moreover, they can purchase local supplies against zero-rated invoices.
To provide further facilitation to the exporters availing Export Oriented Units Rules (SRO 327(I)/2008 dated 29th March 2008) and for ease of doing business, necessary amendments has been made in SRO regarding following, (i) Bond to Bond Transfer of goods through WeBOC without prior approval of the Collector may be allowed. (ii) Supply against international tenders may be treated as exports.
(iii) The requirement of furnishing bank statement for two years for newly-incorporated companies is being relaxed.
In order to facilitate the exporters who were using SRO 492(I)/2009 dated 13.6.2009 for temporary import of goods for subsequent exportation.
The facility is being further simplified and facilities are being increased by allowing the exporters to deposit Indemnity Bond and PDC only, instead of bank guarantee or pay order which caused blockade of capital of exporters.
In addition, the conditions for mandatory examination at the time of export is being abolished and clearance is being allowed to be done on Risk Management System. This will improve ease of doing business by reducing the cost and time for the exporters.
Copyright Business Recorder, 2021