KARACHI (December 14 2002) : The export development surcharge (EDS), which is charged by the Customs at the rate of 0.25 percent on every export consignment before shipment, will be charged by banks on realisation of export proceeds from January 1, 2003.
The Export Promotion Bureau (EPB) and the Collectorate of Customs (Export) have reached an agreement on the procedure for deduction of EDS by banks from export proceeds. The procedure will be forwarded to the Central Board of Revenue (CBR) for issuing SRO giving legal effect to the new system.
The draft procedure provides that the basis of the collection of EDS would continue to be the FOB value of the goods and EDS would be collected at the rate of 0.25 percent of the value of goods.
The exchange rate for purpose of collecting the EDS would be the actual date of realisation of export proceeds.
Under the new procedure a separate designated account would be opened in the National Bank, FTC, Branches, where the EDS collected by banks would be transferred through their respective head offices after collection within 72 hours of the collection.
The head offices of banks would provide monthly summary statement to the Government about the EDS collected through their branches in the country.
The draft SRO of the CBR on the subject does not provide for the goods exempted from EDS, therefore, the same would be re-drafted by the CBR Customs (Collector Exports), Karachi in consultation with the State Bank of Pakistan before the issue.
The State Bank would discuss with the banks about the fee for collecting the EDS on Government behalf and transferring of the same into the designated government account.
The EDS is government money from which deduction may not be possible but providing the facility to their exporters the banks may serve their customers and obtain/retain their account.
The decision, which was made in the new Trade Policy in July, would fulfil a long outstanding demand of the exporters who had pleaded that due to the liquidity crunch they were unable to pay hugse amount of EDS before shipment and it would be a great relief for them if the surcharge is deducted from their export proceeds.