ISLAMABAD: The Federal Board of Revenue has issued draft rules for the new Export Facilitation Scheme 2021 and called for comments from industry, exporters and other stakeholders. The Export Facilitation Scheme 2021 has been approved by Federal Government and passed by Parliament under Finance Act 2021. This scheme will be implemented from 14th August 2021 and will run parallel with existing schemes like Manufacturing Bond, DTRE and Export Oriented Schemes for two years. The existing old schemes shall be phased out in the next two years and be replaced by Export Facilitation Scheme 2021. Draft rules can be accessed at the official website of FBR.

The salient features of the new Export Facilitation Scheme 2021 include minimum documentation and encourages new entrants and SMEs. This scheme will be wholly automated under WeBOC and PSW. The focus of the scheme is on post-clearance compliance checks and audits. This scheme includes exporters (manufacturers cum exporters, commercial exporters, indirect exporters), common export houses, vendors, and international toll manufacturers. Users of this scheme shall be subject to the authorization of inputs by the Collector of Customs and Input-Output Organization (IOCO) director-general. Inputs include all goods (imported or procured local) for the manufacture of goods to be exported. These include raw materials, spare parts, components, equipment, plant and machinery. No duty and taxes shall be levied on inputs imported by the authorized users, and local supplies of inputs to the authorized users shall be zero-rated. This new scheme concept of common export house to import raw material duty and tax-free for subsequent sale to the authorized users, especially SMEs, has been introduced. This scheme also introduces the concept of international toll manufacturing. Under this new scheme, the utilization period has been enhanced from two years to five years, depending on the profile/category of exporters.

It is expected that the Export Facilitation Scheme 2021 shall reduce the cost of doing business and cost of tax compliance, improve ease of doing business, reduce liquidity problems of exporters by eliminating sales tax refunds and duty drawbacks for the users of the scheme and shall attract more users and shall ultimately promote exports.

LEAVE A REPLY

Please enter your comment!
Please enter your name here