Home » News » Finance » Revenue Board planning to do away with SRO 410 incentives

Revenue Board planning to do away with SRO 410 incentives

ISLAMABAD (October 28 2003): To make the 'Duty and Tax Remission for Export' (DTRE) Rules more attractive for exporters, the Central Board of Revenue (CBR) is planning to do away with extraordinary incentives under SRO 410(I)/2001, rendering it less attractive for exporter community in terms of rebate.

Sources told Business Recorder here on Monday that the only way to make SRO.410 ineffective is to withdraw unnecessary concessions being offered to the exporters.

Exporters are enjoying some extra incentives under SRO 410, which forces the authorities to extend the notification time and again.

The CBR has already asked the exporters to complete their preparations for switching over to the DTRE regime before the expiry of the extended deadline of SRO.410 ie December 31, 2003.

However, several extensions in the scheme have prompted the CBR to propose certain changes so that the exporters simply avoid SRO 410 making room for the DTRE scheme.

First, there is no mechanism to check the actual consumption of temporarily imported raw material used in the finished products under SRO 410.

The CBR has never demanded data on the consumption of raw material as per SRO 410 from the exporters.

Secondly, Input-Output Coefficient Organisation (IOCO) should work out the rebate admissible under SRO 410 as the organisation has done in all other sectors for standardisation of the duty drawback regime.

Thirdly, the release of temporarily imported raw material against post-dated cheque should be stopped and the exporters should deposit original bank guarantees for the release of raw materials without payment of duties and taxes.

Fourthly, the duty drawback should be given only on raw material which is actually consumed by the manufacturer-cum-exporters. The officials should ensure that the extent of rebate should be given on the percentage of raw material used in the finished product.

The CBR has recently extended duties and taxes exemption on temporary import of inputs/goods used in the manufacture of finished products to be exported under 'Temporary Importation Scheme' (SRO.410(I)/2001) up to December 31, 2003.

The CBR had amended SRO.410(I)/2001 as most of the manufacturers-cum-exporter were reluctant to operate under the Duty and Tax Remission for Export (DTRE) Rules.

The exporters were also reluctant to operate under the DTRE scheme due to the condition of proper documentation, which is certainty not necessary up to certain extent under SRO 410. Hence, they were pressing the authorities for another extension in the temporary importation scheme.

Sources admitted that extensions in this scheme would certainly discourage exporters to operate under the DTRE Rules.

Now, over 30 value-added industries can temporarily import duty/GST-free goods/raw materials to be used in the manufacturing, assembling and packing of goods for re-export, up to December 31, 2003.

Leave a Reply

X