FBR to introduce key amendments to EFS 2021

ISLAMABAD: The Federal Board of Revenue (FBR) is set to introduce amendments to the Export Facilitation Scheme (EFS) 2021, including a disposal mechanism for used auto parts salvaged during repair and restoration or left over from imported components, well-informed sources in the Commerce Ministry told Business Recorder.

The move follows the government’s recent approval of amendments to the Import Policy Order (IPO) 2022 to allow the temporary import of automobiles for repair, restoration, and subsequent re-export.

According to the Ministry of Commerce, the Special Investment Facilitation Council (SIFC), in its 14th meeting of the Sectoral Executive Committee held on June 18, 2025, decided to launch a pilot project for the import and re-export of refurbished vehicles.

It was also decided to expand the policy framework to include plant machinery and other equipment for refurbishment and re-export.

READ MORE: FBR further tightens EFS for all categories

The Ministry of Commerce was directed to make the necessary amendments to the IPO 2022, while a working group led by the Ministry of Industries and Production was constituted to finalize the execution framework.

Sources said that the existing IPO 2022 does not permit the temporary import of used vehicles and auto parts for refurbishment and re-export. Under Para 5(3), read with Serial Nos. 10 and 11 of Appendix-C, the import of used and second-hand vehicles and auto parts is generally prohibited, except for limited categories such as bulletproof vehicles, firefighting vehicles, ambulances, and certain commercial imports.

The working group held multiple meetings to examine the feasibility of the pilot project under the EFS 2021 framework. The proposal received broad support from stakeholders, who agreed that amendments to both EFS 2021 and IPO 2022 were necessary to operationalise the initiative.

The Ministry of Commerce informed a ministerial forum that a draft summary had been circulated among stakeholders, who endorsed key proposals for submission to the Economic Coordination Committee (ECC) of the Cabinet. These include:

(i) Amendment to Serial No. 10 of Appendix-C of IPO 2022 to allow temporary import of vehicles under PCT heading 8703 by service providers with repair and refurbishment facilities verified by the Engineering Development Board (EDB) and registered with FBR under EFS. Such imports would be strictly for repair, restoration, refurbishment, and re-export.

Importer-cum-exporters would also be required to submit annual reconciliation statements to the relevant Regulatory Collector; (ii) Amendment to Serial No. 11 of Appendix-C to allow temporary import of used auto parts under similar conditions, exclusively for refurbishment and repair purposes, with mandatory reconciliation reporting; (iii) a strict condition that imported vehicles and parts shall not, under any circumstances, be sold, transferred, or disposed of within the domestic tariff area; and (iv) necessary amendments to EFS 2021 by FBR, including a clear disposal mechanism for salvaged or leftover auto parts.

The forum approved the Commerce Ministry’s proposal with the condition that the initiative will be reviewed by the ECC after one year.

Copyright Business Recorder, 2026