ISLAMABAD: The Pakistan Textile Council (PTC) has urged the Federal Board of Revenue (FBR) to exercise caution in amending the Export Facilitation Scheme (EFS), warning that changes that fail to safeguard industry interests could negatively impact Pakistan’s exports.
In a letter addressed to the Secretary of Export Policy at FBR, PTC provided recommendations on the proposed amendments outlined in S.R.O. 204 (1)/2025. The EFS, introduced in 2021, has been instrumental in enhancing the competitiveness of the textile sector by simplifying processes and ensuring smooth export operations. However, the proposed amendments, if implemented without due consideration, could create operational inefficiencies and burden exporters with unnecessary compliance requirements, warns the PTC.
While acknowledging the need for improvements, PTC emphasised that any amendments should focus on enhancing efficiency rather than disrupting established processes. A key concern is the proposed revision of the processing timeline for determining production capacity and input-output ratios.Â
Under the new amendments, the Input Output Coefficient Organisation (IOCO) would have 60 days to process applications, allowing exporters only provisional acquisition of 25% of their declared input goods. PTC argues this extended timeframe would create uncertainty for manufacturers operating under strict schedules and has recommended reducing the processing time to 30 days while increasing provisional approval to 50% to ensure smooth operations.
Another major concern is the extension of monitoring timelines for pending cases under the Chief Collector (Exports & IOCO) from 30 to 60 days, which could further delay approvals and disrupt supply chains. PTC has called for maintaining the 30-day timeline to balance regulatory oversight with operational efficiency.
PTC has also raised concerns over a proposed amendment requiring annual authorisation of input goods based on IOCO assessments, which would make future authorisations contingent upon the Regulatory Collector’s discretion.Â
This, PTC argues, would introduce uncertainty and bureaucratic obstacles. Instead, the council suggests an automatic authorisation process upon submission of reconciliation statements, with any discrepancies addressed through audits to minimise delays while ensuring compliance.
Another contentious amendment is the reduction of the input utilization period from 60 months to just 9 months. PTC considers this impractical, as it would lead to frequent procurement disruptions and increased costs for exporters. The council recommends maintaining a minimum utilisation period of 24 months, with an additional six-month extension granted by the Regulatory Authority. Any further extensions should require approval from an FBR committee, as previously recommended by the board.
The industry is also concerned about the proposed restriction on B-grade or rejected goods, limiting them to just 5% of total production. Given the natural variances in manufacturing, PTC urges FBR to increase this threshold to 10% to align with industry standards and prevent financial losses.
Another critical issue is the proposed elimination of the carry-forward provision for unutilised input goods. PTC warns that removing this flexibility would force exporters to consume input materials faster than their production cycles allow, potentially leading to inefficiencies and increased costs.
PTC has called on FBR to carefully reconsider these amendments to ensure that any policy changes enhance rather than hinder the textile sector’s growth and competitiveness in the global market.
