DTRE rules amended to facilitate exporters

KARACHI (April 13 2003) : On the recommendations on Duty and Tax Remission on Export (DTRE), a number of amendments have been made in the DTRE rules, said Export Promotion Bureau officials on Saturday.

It is now agreed that exporters are obliged to procure some input goods from the local market where these are duty-paid.

To ensure that exporters are completely zero-rated, Central Board of Revenue has agreed to consider allowing local procurement of such duty-paid goods up to a maximum of 10 percent of their requirements in the preceding year, provided the exporters indicate, at the time of DTRE import, that they will not purchase locally any of the items that they are importing under DTRE.

The CBR would work out modality for refund of duties on local procurement of duty-paid goods.

It is further agreed that where exporters make local purchase of input goods in which duty-paid materials have been used, like dyes and chemicals, the local suppliers of such input goods will be treated as indirect exporters and will be allowed to import the required input materials without payment of duties and taxes.

For the indirect exporter, who makes supplies of input goods to the direct exporter, DTRE provides that such supply is covered by a “firm contract”. Now, besides a firm contract, a standard purchase order would also be accepted.

The DTRE obligates the exporter to give the description, quantity and value of input goods to be imported or purchased locally.

It is agreed that precise indications are difficult and that approximate estimates will be accepted with a variation of up to 10 percent. A clarification about this has been issued by the CBR.

DTRE exporter is required to give his own calculated input-to-output ratios. It is agreed that exact input / output ratios may not be possible and that the given ratios would be taken as approximate. This is agreed and a clarification has been issued.

For the purpose of input-output rations, the wastage factor would be worked out on industry-to-industry basis.

CBR has also confirmed that procurement under DTRE rules is zero-rated for sales tax and that, where sales tax is paid, refund will be allowed.

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