New Duty and Tax Remission for Export rules give 117 major concessions to exporters

ISLAMABAD (June 11 2003) : Permitting duty drawback facility on the purchase of locally procured raw material, the government has amended exporters' friendly 'Duty and Tax Remission for Export' rules (DTRE) giving 117 major concessions to exporters.

Now, exporters can procure goods up to 10 percent of contract value from local market to enjoy duty drawback facility.

Therefore, buttons, threads, beads, zips, eyelets, collar-bones, wrapping and packing materials, dyes, glues, buckles, etc can be procured from non-DTRE resources.

The admissibility of DDB up to 10 percent of notified rate for specific items frees the exporters to obtain 100 percent requirement under the DTRE regime.

The new DTRE scheme provides a genuine opportunity to the exporters to opt out from the hassle of seeking refunds from the customs and sales tax departments.

Under the revamped scheme, input adjustment for GST has been made available on electricity and gas.

Movement of duty and tax-free input goods is permitted between the DTRE approved persons.

DTRE manufacturers can get their export goods manufactured from anywhere as long as the vendor/agent is a sales tax registered person.

Sale of admissible wastage is also allowed under DTRE on payment of leviable sales tax.

Polyester stable fibre (PSF), which is the most significant component of value-added textiles has been included in the DTRE scheme, while compensatory duty drawback is admissible under DTRE on locally procured PSF on deemed import basis.

As a result, exporters have the choice of importing PSF or buying it locally.

Duty drawback is admissible to the extent of 10 percent of total input requirement on local purchases.

This limit can be increased for specific goods on the recommendation of Export Promotion Bureau (EPB).

An exporter can opt for the DTRE for sales tax alone in which case he will be entitled to full duty drawback on duty-paid inputs;

Furthermore, the limit for export performance has been reduced from $ 500,000 to $ 100,000 to accommodate small and medium size manufacturers-cum-exporters under DTRE.

An exporter can establish his performance by presenting EE Form verified by the State Bank of Pakistan even if he does not have a complete record of shipping bills.

Permission to cover supplies against international tenders under DTRE enables the local manufacturers to bid on competitive basis;

Enhancement in the period of initial utilisation of inputs from 12 months to 18 months saves the exporter from penal surcharge.

Computation of utilisation period will be done from the date of procurement instead of the date of DTRE approval;

The ceiling for sale of B-Grade material or factory-rejects enhanced to 20 percent.

Penal surcharge limited to value of unutilised inputs instead of value of unfulfilled exports.

Penalty on over-stayed goods has been reduced.

Input goods can now be procured under DTRE against an “export purchase order”.

Exporters need not necessarily have a confirmed contract.

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