Export Facilitation Scheme 2021
GOVERNMENT OF PAKISTAN
REVENUE DIVISION
FEDERAL BOARD OF REVENUE
***
Islamabad, the 30th July, 2021.
NOTIFICATION
S.R.O. 957(I)/2021.- In exercise of the powers conferred by section 219 of the Customs
Act, 1969 (IV of 1969), section 50 of the Sales Tax Act, 1990, section 40 of the Federal Excise
Act, 2005 and section 237 of the Income Tax Ordinance, 2001( XLIX of 2001), the Federal
Board of Revenue is pleased to direct that the following further amendments shall be made in the
Customs Rules, 2001, which, as required under sub-section (3A) of the said section 219, were
previously published vide Notification No.S.R.O. 902(I)/2021, dated the 9th July 2021, namely:-
In the aforesaid Rules, after Chapter XXXIX, the following new Chapter shall be added
from the 14th August 2021, namely:-
“Chapter XL
Export Facilitation Scheme 2021
- Definitions.- In this chapter, unless there is anything repugnant in the subject or
context,-
(a) “acquisition” means import or purchase of foreign origin goods from authorized
user, Common Export House and users of export schemes under SRO 450(I)
2001dated 18.06.2001 Chapter XV, DTRE, SRO 327(I)2008 dated 29.03.2008,
including banned or restricted items or procurement of locally manufactured goods
and taxable or excisable services covered under this Chapter, including energy
sources such as coal, coke of coal, carbon blocks, diesel, furnace oil or gas etc. for
in house energy production or use in the manufacturing process and also includes
Engineering Goods as classified under chapter 72 to 96 or as approved by
Engineering Development Board (EDB):
Provided that acquisition of banned or restricted items shall be subject to prior
permission from the Ministry of Commerce;
(b) "Act" means the Customs Acts, 1969 (IV of 1969), the Federal Excise Act, 2005,
the Sales Tax Act, 1990, and the Income Tax Ordinance,2001(XLIX of 2001);
(c) “analysis certificate” means a certificate issued by the Regulatory Collector or
the Director Input Output Co-efficient Organization (IOCO), as the case may be,
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either manually or electronically, showing input and output ratios of input goods
vis–a–vis finished goods along with wastages, as per Appendix II under these rules
(d) “appendix” means an Appendix to this Chapter;
(e) “applicant” means a person who files an application in the form set out in
Appendix I for grant of authorization under this chapter;
(f) “commercial exporter” means a person engaged in purchase and export of goods
in the same state from the domestic market or from an indirect exporter and export
these goods;
(g) "Common Export House" means a warehouse authorized by the Collector under
this chapter, for import, warehouse and supply of input goods without payment of
customs duty, sales tax, federal excise duty and withholding tax, to the small and
medium export enterprises, direct or indirect exporters or commercial exporters;
(h) “corporate export enterprise” means an export unit registered with the SECP;
(i) “direct exporter” means a manufacturer cum exporter who is exporting the goods
under the name of his firm or company 3[authorized under these rules];
(j) “engineering goods” includes goods classified under Chapter 72 to Chapter 96 of
the First Schedule of the Customs Act, 1969 or as approved by the EDB;
(k) “export” includes supply of goods,–
(a) by an indirect exporter to a direct exporter 4[or a commercial exporter];
(b) 2[omitted];
(c) 2[to industrial units, projects, institutions, agencies and organizations,
entitled to import the same at concessionary rates, and]
(d) to export processing zones, and Gwadar free zone;
(l) “indirect exporter” means a person who has a firm contract or export purchase
order from a direct exporter or commercial exporter for the manufacture and
supply of goods to such exporter 3[authorized under these rules];
(m) “input goods” means goods whether imported or procured locally and includes
services eligible for acquisition. Such “import” includes the purchase of input
goods from a Common Export House or from the licensees of S.R.O 450(I)/2001,
dated the 18th June, 2001, Chapter XV, DTRE or S.R.O 327(I)/2008, dated the 29th
March, 2008, used in the manufacture of output goods, as approved in the analysis
certificate;
(n) “insurance guarantee” means a guarantee issued by an insurance company
registered with the Ministry of Commerce and has a minimum Pakistan Credit
Rating Agency rating of “AA”;
(o) “international toll manufacturing” means an arrangement wherein a foreign
principal provides input goods to an exporter to produce finished goods for
subsequent export;
(p) “large export enterprise” means an export unit having export quantum above five
million US dollars per annum;
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(q) 5[omitted] “manufacture” includes any process in which an article singly or in
combination with other articles, materials or components, is either converted into
another distinct article or product or is so changed, transformed or reshaped that it
becomes capable of being put to use differently or distinctly and includes any
process incidental or ancillary to the completion of a manufactured product;
(r) “manufacturer” includes any person engaged in the process of manufacture and
duly authorized to do so under these rules, duly registered as manufacturer under
the Sales Tax Act, 1990;
(s) "manufacturer-cum-exporter" means any person or firm registered under the
Sales Tax Act, 1990 as a manufacturer-cum-exporter;
3[(sa) “online market place" means an electronic interface such as a market place, e-
commerce platform, website portal or similar means which facilitate export of
goods, including third party export;]
(t) “Pakistan Single Window (PSW)” means a facility as defined under clause (m)
of section 2 of the Pakistan Single Window Act, 2021;
(u) “regulatory authority” means Additional Collector of Customs duly authorized
by the Collector to act on his behalf under these rules;
(v) “regulatory collector” means the Collector of Customs in whose jurisdiction the
place of business or manufacturing unit of the applicant, duly registered under the
Sales Tax Act, 1990, is located. In case an applicant has multiple manufacturing
facilities in different jurisdictions, the Collector in whose Jurisdiction, the head
office of the applicant 3[or principal manufacturing unit] is located shall act as the
Regulatory Collector;
(w) "small and medium export enterprise” means an export unit having export
quantum up to five million US dollars per annum;
(x) “utilization period” means the period commencing from the date of import or
local purchase of the input goods to the date of export of the output goods as
specified in rule 783;
(y) “user” means a person authorized to utilize this scheme; and
(z) "vendor" means a person who is registered under the Sales Tax Act, 1990; and to
whom goods are provided by the authorized exporter under this chapter for further
processing towards the manufacture of output goods.
872. Scope of the scheme.– (1) This scheme shall be available to the following
persons subject to authorization of import, warehouse and purchase of input goods under these
rules and registration in the WeBOC or PSW:
(a) persons registered under the Sales Tax Act, 1990, as manufacturer-cum-exporter,
who make value-addition in the manufacture and export of goods, which shall not
be less than ten per cent 4[in USD terms for imported goods and in Pak Rupees for
locally procured goods, on annual aggregate basis];
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(b) manufacturers who act or intend to act as contracted vendors of foreign principal
as toll manufacturers;
(c) commercial exporters;
(d) persons registered under the Sales Tax Act, 1990, as manufacturer and operating
as indirect exporters;
(e) manufacturers including manufacturers of engineering goods who intend to supply
against international tenders; and
(f) Common Export House:
Provided that this scheme shall be allowed for the export of goods authorized under the
export policy order. In case of export of goods restricted or prohibited under the export policy
order, specific permission from the Ministry of Commerce shall be required 5[:
Provided further that the EFS users shall import their goods at the first port of entry or
from the ports or dry ports falling under the jurisdiction of their Regulatory Collector.]
- Authorization for acquisition of input goods. – (1) Acquisition of input goods
without payment of duty and taxes under these rules shall be granted based on:
(a) export performance for last two financial years; and
(b) firm contract of export 5[:
Provided that where the applicant has no previous export history, the firm contract shall
be allowed subject to-
(a) detailed scrutiny by the Regulatory Collectorate including but not limited to
financial viability, production capacity and history of local supplies; and
(b) mandatory approval of the Chief Collector for all firm contracts above $ one
million. However, where the applicant has firm contract and submits a bank
proof of advance payment, the Regulatory Collector after detailed scrutiny, as
required under clause (a), may grant authorization at his own without referring
the case to Chief Collector.]
(2) The applicant can apply for authorization based on both performance and contract
basis simultaneously.
(3) An applicant having multiple contracts of export may apply for consolidated approval
for all such contracts.
- Categorization of exporters.- (1) For the purpose of this chapter exporters shall
be treated as per the following categories:
(i) Category A: Manufacturers-cum-exporters with 60% or above exports of their
total annual production 3[or exports with minimum value of USD 20 million] in
last two years.
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| Sr. No. |
|---|
export or export history | Category Allocation due to poor
profile for a period of one year. |
| (1) | (2) | (3) |
|---|---|---|
| 1 | Category A | Category B1 |
| 2 | Category B1 | Category C1 |
| 3 | Category B2 | Category C2 |
| 4 | Category C1 | Category C2 |
| 5 | Category C2 | No Authorization |
(ix) approximate value of the input goods;
(x) input-output ratio for the manufacture of one unit of output good; and
(xi) recommendation of respective Chamber of Commerce and Industry,
respective trade association or Small and Medium Enterprise Development
Authority (SMEDA) in case of small and medium exporters.
876. Security instrument for authorization.- (1) The applicant shall submit a
security instrument equal to the duty and taxes being deferred or remitted, on the approximate
value of input goods, during the authorization period along with the application as detailed
below:
(a) Category A: Indemnity bond as set out in Appendix-III and PDC;
(b) Category B1: Indemnity bond as set out in Appendix-III and PDC for
manufacturer cum exporters with a self-owned manufacturing facility and
Revolving Insurance Guarantee 5[or revolving bank guarantee] covering their
annual requirement, for Manufacturer-cum- exporters with a rented production
facility;
(c) Category B2: Revolving Insurance Guarantee 5[or revolving bank guarantee]
for manufacturers with self-owned manufacturing facility covering their annual
requirement, Revolving Bank Guarantee for manufacturers with rented
production facility covering their annual requirement till three years benchmark is
crossed and graduating to B1 category;
(d) Category C1: Indemnity Bond as set out in Appendix-III and PDC for
manufacturers with self-owned manufacturing facility and Revolving Insurance
Guarantee 5[or revolving bank guarantee] for manufacturers with rented
production facility and commercial exporters, covering their annual requirement;
and
(e) Category C2: Revolving Insurance Guarantee for manufacturers with a self-
owned manufacturing facility and Revolving Bank Guarantee for manufacturers
with rented production facility and commercial exporters, covering their annual
requirement till three years benchmark is crossed and graduating to C1 category
4[:
Provided that the PDC to be submitted shall be of the bank account for which
bank statement has already been submitted to the Regulatory Collectorate in
terms of rule 875(2)(vi).
877. Processing of application for authorization to use the scheme.- (1) The
application for authorization to operate under this scheme shall be submitted online to the
Regulatory Collector. The WeBOC or PSW system shall assign a unique identification number
to each application for authorization. In the case of goods other than same-state goods, the input-
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output ratios and wastages under this chapter shall be declared by the applicant in the
application.
(2) Subject to rule 898 (2), in case the applicant is the existing user of any of the
previous export schemes like S.R.O 450(I)2001, dated 18.06.2001, Chapter XV, DTRE 6[, S.R.O
327(I)2008, dated 29.03.2008 and S.R.O 492(I)/2009 dated 13.06.2009], and intends to shift to
Export Facilitation Scheme, 2021, he may be considered for authorization by the Regulatory
Collector under these rules subject to his satisfaction and satisfactory compliance history under
previous schemes. If the applicant has stocks of input goods imported under any of the previous
schemes, he shall declare description, PCT, quantity and value of the stocks, at the time of
application and the Regulatory Collector shall upload the same in WebOC or PSW against the
authorization of the applicant.
(3) Subject to rule 898 (2), the online application along with approved Analysis
Certificate, of all existing users of export promotion schemes under SRO 450(I)2001, dated
18.06.2001, Chapter XV, DTRE, 6[S.R.O 327(I)2008, dated 29.03.2008 and S.R.O 492(I)/2009
dated 13.06.2009], shall be processed by the Regulatory Collector by uploading the approved
value of the input goods along with the details of the security instrument as applicable in the
WeBOC or PSW system and IOCO database after satisfying himself regarding the compliance
profile of the applicant and the value of the input goods being commensurate with performance
and production capacity of the applicant, within seven days of its receipt.
(4) In case the application has new input goods or output goods, or the applicant
claims that there is change in the Input 3[output] ratio already determined due to any change in
technology, the Regulatory Collector shall refer the case to the Directorate General of IOCO or
the EDB as the case may be immediately after receipt of the application, for determination of the
Input-Output ratios within thirty days of the receipt of the application, showing the actual
quantity of input goods used and wastages occurred in the manufacture of one unit of output
goods. A new Analysis Certificate shall be issued and uploaded in the WeBOC OR PSW system
by the Director IOCO:
Provided that the exporters falling under “category A” can apply to the Regulatory
Collector, within seven days of the import of the goods or sixty days before the first export of
the output goods, for issuance of analysis certificate if not issued already, showing the input and
output ratio of input goods vis–a–vis finished goods along with wastages in the prescribed
format.
(5) In case of an application by an exporter who was not using any of the export
promotion schemes prior to issuance of these rules, the Regulatory Collector shall in case of a
new application upload the authorization if the input output ratios already exist in the IOCO
database and are acceptable to the applicant. In case the input goods or output goods are not
covered in any Analysis Certificate issued previously, he shall refer the case to IOCO for
determination of input out ratios and production capacity of the unit after satisfying himself
regarding the compliance profile of the applicant, within seven days of its receipt:
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3[“Provided that the Regulatory Collectorate shall issue analysis certificate within 3 days
of application by the user provisionally as per declared input output ratios and wastages pending
final determination or revision by IOCO or EDB, as the case may be;
Provided further that the quantity equivalent to hundred percent capacity of the producing
or manufacturing unit may be approved provisionally by the Regulatory Collectorate, as applied
by the user. However, up to fifty percent quantity may be allowed to be used by the time IOCO
or EDB, as the case may be, determines output and input ratios.]
(6) The IOCO shall commence processing of the case immediately. The Director
IOCO shall complete the exercise within thirty days of the date of the application. In case the
Regulatory Collector or the IOCO fails to process the application within thirty days, the WeBOC
or PSW system shall automatically allow acquisition against 100% of the value of input goods
involved as declared by the applicant provisionally, based on the declared input output ratios.
The provisional permission shall be subject to modification once the IOCO finalizes its
assessment of the input out ratios, the Director IOCO shall upload the authorized value in the
WeBOC or PSW System
(7) The IOCO after determining the Input and output ratios and production capacity
of the exporter will issue an “Analysis certificate” showing quantities of input goods required for
the manufacture of the one unit of output goods and the ratio of wastages.
(8) The Director IOCO shall upload the value of input goods to be acquired by the
user. The Director IOCO may reduce the demanded authorization according to the production
capacity of the exporter.
(9) Director IOCO may determine the production capacity through designating a
team comprising of at least two officials of IOCO, by visiting the manufacturing premises of the
applicant. Director IOCO may also acquire services of any third party including accredited
Chartered accountant firm or any other body recognized by the Government of Pakistan to
handle industrial affairs for determination of production capacity, input-output ratios and
wastages including the Engineering Development Board.
(10) 6[omitted. Buttons, belts, pads, velcro tapes, hangers, special labels, price labels,
tags, special buttons, push buttons, rivets, eyelets, buckles, special brand tags, zippers, locker
loops, unit soles with heels, soles, heels, valves and bladders for footballs, textile designs,
artwork transparencies, polypropylene woven and jute bags imported for use in readymade
garments, foundation garments, textile made-ups, footwear etc. where there is no wastage
generated during manufacturing for exports shall be allowed to be imported against quota and
input-output ratio declared by the EFS user subject to approval and verification by the
Regulatory Collectorate without referring the case to IOCO or EDB as the case may be:
Provided that tags and printed materials supplied by a foreign supplier without the
involvement of foreign exchange from Pakistan shall be allowed to be imported without any
quantitative restriction for the purpose of this Chapter.]
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| Sr.No. | Category | Authorization Period |
|---|---|---|
| (1) | (2) | (3) |
| I | Category A | Five years |
| II | Category B1 | Four years |
| III | Category B2 | Two years |
| IV | Category C1 | Four years |
| V | Category C2 | Two years |
(4) The renewal of the authorization shall be subject to satisfaction of Regulatory
Collector that no action un