Refund of sales tax paid on power and gas allowed to DTRE-approved exporters

KARACHI (July 18 2003) : Mumtaz Haider Rizvi, Member Exports, Central Board of Revenue (CBR), informed the business community that under amended rules refund or input adjustment of sales tax paid on electricity and gas has been allowed to the DTRE approved exporters to the extent of proportionate consumption thereof in the production of exported goods.

Speaking at a seminar on 'Duty and Tax Remission on Exports (DTRE) Rules' organised by Site Association of Industry (SAI) at association office, he said that the new look of 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.

He said that with the assistance and proposals of business community several changers were made in the DTRE scheme to make it more practicable.

“After trial and error, we have come to a conclusion that tax payers and tax collectors should be on one side of the table.”

He said that every objection, complaint and suggestion, we received regarding DTRE scheme, was examined carefully and change was made in the scheme where it was possible.

He said that now an exporter can sell his admissible wastage in the local market on payment of sales tax liable thereon.

He said that the exporter can also sell his B-grade products and factory rejects only up to 20 percent of the exports as per contract under rule 297 on payment of duties and taxes liable on the finished goods in addition to the surcharge as per rule 298 subject to the provision of the import policy order.

Mumtaz said that the limit for export performance has been reduced from 500,000 to 100,000 dollars to accommodate small and medium size manufactures cum exporters under Duty and Tax Remission for Exporters (DTRE) scheme.

Rizvi said under amended rules an exporter can transfer his duty and tax free input goods to another DTRE approved exporter of the same goods.

Likewise an exporter can dispose of unutilised input goods other than banned items in local market on payment of surcharge as per rules.

He further said that the DTRE scheme allows an exporter to dispose of the banned and unutilised input goods subject to the approval of the ministry of commerce, on payment of surcharge as per rules and on the conditions prescribed by the ministry in this regard.

Speaking on the occasion Fazal Qadir Qalbani, Director DTRE, said that polyester staple fibre (PSF), which is a significant component of value-added textile has been included in the DTRE scheme.

He said compensatory duty drawback is admissible under DTRE on locally procured PSF on deemed import basis.

Now the exporters have the choice of importing PSF or buying it locally.

He said that 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 recommendations of Export Promotion Bureau (EPB)

Welcoming the guests, Haroon Farooki, Chairman SAI, said that exporters can save millions of rupees by avoiding sales tax, customs duty and withholding tax refunds by not paying in the first place, after registration in DTRE scheme.

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