LAHORE: The Federal Board of Revenue (FBR) has notified draft rules for the Export Facilitation Scheme (EFS), 2021, which will be effective with effect from August 14.
The new scheme has been approved by the federal government and passed by parliament under the Finance Act, 2021. This scheme will run parallel with existing schemes like manufacturing bond, DTRE and other export oriented schemes for two years.
The existing old schemes shall be phased out in the next two years and will be fully replaced by the new scheme, rules for which can be accessed at the official website of FBR.
The new EFS-2021 includes minimum documentation and encourages new entrants and SMEs. Users of this scheme will include manufacturers cum exporters, commercial exporters, indirect exporters, common export houses, vendors and international toll manufacturers, who will be subject to the authorisation of inputs by the collector of customs and Input-Output Organisation (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 authorised users and local supplies of inputs to the authorised users shall be zero-rated.
Through this new scheme, common export house will import inputs duty and tax-free for subsequent sale to authorised users, especially SMEs.
This scheme has also allowed international toll manufacturing within Pakistan. Under the said scheme, minimum but necessary documentation and securities based on category and profile of the applicant, user or exporter will be required.
This scheme will encourage new entrants and SMEs and will be completely automated under WeBOC and PSW wherein users and regulators shall be integrated and communicate through these systems.
The focus of the scheme is on post-clearance compliance checks and audits.
it may also be mentioned that the authorisation and utilisation period have been enhanced from two years to five years.
The Export Facilitation Scheme, 2021 shall reduce the cost of doing business as well as cost of tax compliance, improve ease of doing business (EODB), reduce liquidity problems of exporters, attract more users and ultimately promote exports.