PM''s exports package: Notification submitted to L&JD for taxes drawback

The Ministry of Textile and Industry (MoT&I) has submitted a notification to the Law and Justice Division (L&JD) for vetting to extend the drawback of taxes in pursuance of Prime Minister''s Package of incentives for exporters, it is learnt.
Official sources revealed to Business Recorder that the Ministry of Textile Industry has drafted a notification for drawback of taxes in pursuance of Prime Minister''s Package of incentives for exporters announced on January 10, 2017.
The Federal Board of Revenue (FBR) has also submitted the notification for vetting to the Law Division for withdrawal of customs duty and sales tax on cotton, custom duty on manmade fibers other than polyester and, zero-rating sales tax on textile machinery.
The first part of the textile ministry notification contains duration from January to June 30, 2017, in which the drawback would be available on exports without any condition for enhancement.
The second part of the notification will be applicable from July 1, 2017 to June 30, 2018 and the facilities would be made available on 10 per cent performance and if crossed the mark then drawback would be available on entire exports. The incentives would be given to exporters, registering 10 per cent increase over the previous year and would be given on entire export; however exporters not reaching the threshold of 10 per cent increase could not take benefit from the package.
The second part is about the next fiscal year 2017-18 and the facilities would be made available on 10 per cent performance and if crossed the mark then drawback would be available on entire exports. The drawback would be available to garments at 7 per cent, made-ups at 6 per cent and processed fabrics at 5 per cent. For the very first time it is extended to yarn and greige fabric at 4 per cent.
Sources further said that facility would also be announced by the Ministry of Commerce for non-textile categories such as leather tanned, leather garments, surgical, sports and cutlery products.
The Federal Board of Revenue (FBR) would also issue notifications for textile sector for withdrawal of customs duty and sales tax on cotton, customs duty on manmade fibers other than polyester and sales tax on textile machinery. Cotton attracts 4% custom duty and 5% sales tax while textile machinery attracts 10% sales tax. Man-made fibers other than polyester attract 3% customs duty. After the issuance of notification all these duties would be made zero.
All the notifications by Ministry of Commerce, Ministry of Textile and Federal Board of Revenue are submitted to Law and Justice Division for vetting before issuance. It is learnt that it would be cleared on priority for early issuance to facilitate the exporters. According to sources it is expected that notifications would be vetted on Monday and may be issued on the following day.