Misuse of dyes imported under EFS: FBR chairman takes notice of concerns raised by PCDMA
KARACHI: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has taken notice of concerns raised by the Pakistan Chemicals and Dyes Merchants Association (PCDMA) over the possible misuse and diversion of dyes and chemicals imported under the Export Facilitation Scheme (EFS) to the local market.
Following the FBR chairman’s directions, Customs Export held a consultative meeting with the PCDMA at Customs House Karachi to discuss the formulation of an effective monitoring mechanism to ensure that dyes and chemicals imported under the EFS are used for their intended purpose.
The meeting was attended by Collector Customs Exports Afnan Khan, Deputy Collector EFS Waqar Ahmed, PCDMA Chairman Saleem Mukati, Senior Vice Chairman Shahid Bashir, former chairmen Salim Valimuhammad and Abdul Rasheed Khatri, along with other Customs officials.
During the meeting, Collectorate of Customs Exports officials and the PCDMA delegation agreed on the need to prevent possible misuse of the EFS and develop an effective monitoring mechanism. The two sides also discussed cooperation to strengthen the scheme’s contribution to the promotion of the country’s exports.
The PCDMA delegation briefed the Customs officials on its concerns regarding the possible misuse of EFS imports, particularly textile dyes and chemicals, including reactive dyes imported under PCT 3204.1600, including chapter 28 and chapter 29.
The association pointed out that imports under the EFS have been increasing, but the corresponding impact on export growth has not been evident, raising concerns over possible misuse of the scheme.
The PCDMA delegation urged the Collector Customs Exports to ensure that dyes and chemicals imported under the EFS are used by the designated industries rather than being diverted for sale in local markets.
It also called for a review of the quantities of raw materials being imported in the names of industries under the EFS and their actual consumption levels. The association stressed the need to determine whether the imported raw materials were being fully utilized in the industries for which they were imported or were being diverted to the domestic market.
The meeting also involved an exchange of data relating to imports. The PCDMA emphasised that permission for imports under the EFS should be based on a consumption formula and that such imports should be linked with exports.
The association said such measures could help prevent possible misuse of the scheme and ensure that duty and tax concessions provided under the EFS were utilized for their intended purpose.
The participants also stressed the need to improve administrative procedures and introduce a transparent audit mechanism to effectively monitor the use of raw materials imported under the EFS.
Copyright Business Recorder, 2026