FBR Withdraws Export Facilitation Scheme for These Importers

The Federal Board of Revenue (FBR) has announced major measures for checking the massive misuse of the Export Facilitation Scheme (EFS) 2021 by importers of iron and steel scrap. The FBR has issued an SRO 204(I)/2025 to withdraw the EFS facility from the importers of iron and steel scrap, who were importing spare parts of cars under the garb of this export scheme. In this regard, the FBR has made several amendments in the EFS-2021. According to the revised procedure, the proposed changes in the EFS seek a reduction in input utilization period, input authorization based on production capacity/input-output ratio, replacement of insurance guarantees with bank guarantees, vendor facilitation controls, withdrawal of samples to ensure the utilization of imported input in the exported goods, and withdrawal of EFS facility from importers of iron and steel scrap. The input goods acquired under these rules shall be utilized within nine months extendable in exceptional circumstances by a committee to be constituted by the board. For supplies against international tenders or to exempt projects or sectors in Pakistan, the user shall be required to file a declaration in the WeBOC system, the FBR said. An applicant showing a poor compliance profile i.e. having one or more contravention cases adjudged against him or having pending recovery cases or pending criminal proceedings, the authorization granted shall on providing an opportunity of defence be suspended immediately and the Regulatory Collector may initiate proceedings for cancellation of the authorization besides other legal action, new rules said. The authorization of the value of input goods shall be uploaded for each year based on the annual estimated requirement determined by the Input-Output Coefficient Organisation (IOCO). The uploading of the authorization for the subsequent year shall be subject to the satisfaction of the regulatory collector that no action under the Customs Act is pending against the user and the user has submitted all reconciliation statements.