Export Facilitation Schemes for Small and Medium Exporters in Sialkot Region
"Explore the 2021 export facilitation schemes by the Collectorate of Customs in Sambrial, Sialkot, focusing on manufacturing bond rules, simplification through a single administrative document, eligibility criteria, and categorization of traders under the scheme. The schemes aim to increase accessibility, predictability, and reduce compliance costs for exporters, offering different levels of facilitation based on exporters' history, compliance record, and contribution to exports."
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Export Export Facilitation Facilitation Scheme 2021 Scheme 2021 BY COLLECTORATE OF CUSTOMS, SAMBRIAL,SIALKOT
Manufacturing Bond Rules (SRO 450(I)/2001 ,Rules merged in chapter for Warehousing) Temporary Importation Scheme SRO 492(I)2009 DTRE (Sub Chapter 7, SRO 450(I)2001 2001 2001 2009 Export Export Schemes Schemes 2001 2008 Chapter on Raw Hides Sub Chapter 5, SRO 450(I) 2001 SRO 326(I)/2008 & 327(I)/2008 (The Export Oriented Units & Small & Medium Enterprise rules 2008)
Simplification of Export facilitation schemes through a single administrative document Concept Concept Behind EFS Behind EFS 2021 2021 Increasing the accessibility of the scheme to small and medium exporters Increase predictability and reduce cost of compliance for exporters
Eligibility Eligibility Manufacturing Bond DTRE EOU EFS 2021 " manufacturing bond" means a premises having a proper boundary wall, with clearly defined areas of, bonded warehouse; manufacturing facility; andother stores License under Duty and Tax Remission for exports export-oriented unit includes a small and medium enterprise and means a manufacturer having in-house manufacturing facility and exporting -, At least 80% of its production 50% of its production as an engineering unit for the first three years and after that 80% of its production ExportFacilitation Scheme based on Advanced Authorization to import/acquire input goods. Export performance in last two years or Contract based Manufacturer-cum-exporter Exporters Manufacture cum exporter with 15% Value addition vendors of foreign manufacturers or foreign buyers commercial exporter Manufacturer cum exporter Manufacture cum exporter 10% value addition Manufacturers (Indirect exporter) vendors of foreign manufacturers or foreign buyers commercial exporter Export warehouse
Categorization of Traders Under EFS 2021 Categorization of Traders Under EFS 2021 Different exporters with different compliance record and performance should not be treated at par Exporters having good export history and compliance record should be given maximum facilitation as risk is low Manufacturer cum exporters should be treated differently from commercial exporters and indirect exporters, as they contribute most to exports New entrants and exporters with limited history should be incentivized to graduate to next category based on performance and compliance Risk Mitigation for new entrants and commercial exporters
Categorization of Traders Under EFS 2021 Categorization of Traders Under EFS 2021 Category A Manufacturers & exporters Category B Manufacturers & exporters Indirect Exporters Commercial Exporters Toll Manufacturers Common Export Warehouse All existing users of export schemes New users being Targeted Existing users as well as targeting new users Indirect exporters Manufacturers having firm Contract with a direct manufacturer/exporter, or commercial exporter and Commercial exporters New sector Existed but not implemented Owners of Common Export warehouse International Toll Manufacturing manufacturers with an arrangement where the foreign principal provides input goods to an exporter to produce finished goods for subsequent export against a prescribed fee Manufacturers cum exporters with 60% or above exports of their total annual production Manufacturer cum exporters with less than 60% total annual production being exported Subcategory B-1 Exporters having more than 3 years export history Corporate manufacturers (registered with SECP) Large Manufacturers Small & Medium manufacturing Enterprise Subcategory C1: With more than 3 years export history Subcategory C2: With less than 3 years export history Subcategory B-2 Exporters having less than 3 years export history
Export Targets Export Targets Manufacturing Bond DTRE EOU Proposed Scheme 60% export of total production 100% At least 80% of its production 50% of its production as an engineering unit for the first three years and after that 80% of its production NO FIXED TARGET OF EXPORT Permission for domestic sale by Collector in case of reasons beyond control of exporter led to non export Different set of facilities/securities and safeguards based on export of total production
Application under Previous Schemes Application under Previous Schemes Manufacturing Bond DTRE EOU Application Site plan with separate storages for bonded goods and other goods NTN Bankers Certificate Memorandum of Association/partnership deed Copy of CNICs of directors A general Bond Lease of tenancy agreement Certificate for fire fighting equipment Pay order in favor of collector equal to the establishment charges Recommendation of relevant trade association or CC&I Details of type of machinery installed The site plan covered area and manufacturing area and separate storage areas for manufactured goods, factory rejects and wastages; NTN certificate; banker s certificate, Memorandum and Articles of Association or partnership deed; Copy of the CNIC of owner and directors general bond equal to the amount of duty and taxes Lease or tenancy agreement Certificate of fire fighting equipment Comprehensive insurance policy, issued by an insurance company having paid up capital not less than Rs.120 million, An undertaking by an insurance company on the stamp paper that- Full premium under the aforesaid insurance policy has been duly received; recommendations of the representative trade association, or CCI or TDAP. details of the type of machinery installed. Application Performance based Contract based Collector may verify the particulars of the exporter through Premises inspection Determine production capacity Sales tax profile
Application Under EFS 2021 Application Under EFS 2021 Online Application through WeBOC Analysis Certificate Data base to be created, comprising of certificates issued by IOCO or Regulatory Collectors under previous schemes Existing users of to get approval on previous input-output ratios (IOR) and option to transfer stocks Processing of application by Regulatory Collector, where IOR of inputs already available in the data base. Case to be referred to IOCO, if IOR for any new item is required or applicant wants fresh IOR Application to be processed by the Collector in 7 days and IOCO in 30 days failing which System will allow import authorization as per declared IORs. Import authorization based on Value of Imports but security to be deposited on duty and taxes Option to add or delete new items during authorization period Option to increase or decrease authorization value based upon new contracts during authorization period Option to get immediate authorization in case of just in time orders where input goods are being airlifted.
Security of Duty and Taxes Under EFS 2021 Security of Duty and Taxes Under EFS 2021 Performance Based Contract Based Category A Manufacturers Category B-1 Manufacturers with 3-year export history Category B-2 Manufacturers with less than 3-year export history Category C-1 Indirect manufacturer/ Commercial Exporters Category C-2 Indirect manufacturer/ Commercial Exp. (Above 60% exports) (Below 60% exports) Not targeted before (3 yr. History) (Less than 3 yr. history) Revolving Insurance Guarantee manufacturers with a self-owned facility Revolving Guarantee Manufacturers with rented production facility commercial exporters till three years benchmark Indemnity bond & PDC for manufacturer cum exporters with self- owned manufacturing facility Revolving Insurance Guarantee for manufacturers with self-owned manufacturing facility, Indemnity Bond and PDC for manufacturers with self-owned manufacturing facility, Revolving Insurance Guarantee for Manufacturers with rented production facility& Commercial Exporters Security according to category of the exporter Indemnity bond and PDC for Bank for Revolving Bank Guarantee for Manufacturers with rented production facility till three years benchmark Revolving Insurance Guarantee for Manufacturer cum exporters with a rented facility or
Input Input- - Output Ratios Output Ratios Manufacturing Bond DTRE EOU EFS 2021 Input/output ratios and wastages Total Production capacity Structured report with pictures of premises, management and finished goods by IOCO IOCO will complete the exercise in 30 days Sectoral database of input/output & wastages by IOCO no fresh determination required if IOR already exist IOCO to upload quantities if ratios already exist in database for the sector Automatic allocation of import authorization up to 100% of demanded value if IOCO cannot determine ratio in prescribed time Option to file review before DG IOCO Analysis certificate issued by Collector After getting input from IOCO or EDB Provisional Analysis certificate Sample of finished good to be retained by the Collectorate Redetermination request by unit if improved efficiency above 1% or reduced efficiency by 3%. Tags and printed materials without quantitative restriction Referral of application in 7 days to IOCO/EDB IOCO/EDB to determine input- output ratio and wastages within 30 days Provisional approval of DTRE if delayed beyond 33 days The licensee shall apply to the Collector, within seven days of import of input goods, for issuance of any analysis certificate showing the input and output ratio of input/ output goods along with wastages. The Collector, shall after verification, or after getting inputs from the IOCO or EDB issue an analysis certificate within thirty days Online Application submitted to Collector. Collector to refer the case to IOCO to determine
Input Goods Allowed Input Goods Allowed Manufacturing Bond DTRE EOU EFS 2021 input goods" means all goods, required for the manufacture of goods meant for export, such as raw materials, accessories, Sub-components components, sub-assemblies, assemblies and includes Coal, diesel, gas and furnace oil unrecorded media for development of software recorded software used as tools for development of software input goods means goods and includes services eligible for acquisition and also includes, input goods means all goods whether imported or procured locally by an Export Oriented Unit from the tariff area such as raw materials, accessories, sub-components, components, assemblies, sub-assemblies Plant, machinery, equipment and apparatus, including capital goods to be used solely within the limits of an Export Oriented Unit coal, diesel, gas, furnace oil, coke of coal and carbon blocks used in the manufacture of out put goods Input goods means all goods whether imported or procured locally (including energy sources such as coal, coke of coal, carbon blocks, diesel, furnace oil or gas etc. for in house energy production or use in the manufacturing process and also includes Engineering Goods as classified under chapter 72 to 96 or as approved by EDB: (a) trims and accessories; (b) electricity and gas on which sales tax has been paid; and (c ) gas, furnace or diesel oil, coal, coke of coal and carbon blocks for the generation of electricity used or consumed in the manufacture of output goods for export
Domestic Purchase of Input Goods Domestic Purchase of Input Goods Manufacturing Bond DTRE EOU EFS 2021 Not allowed Not allowed Zero rated domestic procurement of input goods allowed Zero rated domestic procurement of input goods allowed Domestic Sale of Output Goods Domestic Sale of Output Goods Manufacturing Bond Allowed upto 40% DTRE EOU EFS 2021 Not Allowed Transfer Permissible to other DTRE users only Allowed upto 20% Domestic sale of 20% output goods allowed against Duty and payment. No lower limit, but quantity exceeding 20% subject to surcharge also
Utilization Period Utilization Period Manufacturing Bonds DTRE Export Oriented Units 2 Years utilization period for raw materials which can be further extended by Chief Collector. 5 years retention period for machinery. 2 Years (extendable upto further one year 1 Year further extendable by Chief Collector EFS 2021 Category Category A (Above 60% exports) Category B1 (Below 60% exports, 3 yr. History) Category B2 (Below 60% exports, less than 3 yr. History) Category C1 Indirect/commercial exporter (3 yr. History) Category C2 Indirect/commercial exporter (less than 3 yr. History) Utilization Period Five years Four Years Two years Four years Two years
Facilities Facilities 1. Advanced import authorization for maximum period of 5 years 2. Duty and taxes free import of Raw Materials 3. Option to procure raw material without payment of Sales tax (zero rating) from domestic market 4. Option to import plant machinery and other capital goods 5. Option to import/acquire raw materials for production of power 6. Annual reconciliation statement submitted online in WeBOC, to trigger next year s authorization automatically 7. Option for Increment in authorized value and quantity 8. Option to get authorization against performance and contract simultaneously 9. Option to transfer raw material to vendor for manufacturing 10.Option to associate indirect exporter
Facilities (Cont.) Facilities (Cont.) 11. Option to transfer surplus raw material to other manufacturers cum exporter, indirect exporter or common Export house due to change in contract or any other incidence rendering use of raw material by manufacturer not possible. 12. Option to sell unused raw materials to Common export house 13. Option to dispose wastage on payment sales taxes only 14. Option to sell unused raw material and finished good in domestic market on payment of duty and taxes plus surcharge @ KIBOR plus 3% 15. Option to sell 20% output goods in domestic market on payment of duty and taxes, quantity in addition to 20% shall also be subject to payment of surcharge
Safeguards Safeguards 1. Security for duty and taxes being exempted/deferred 2. Profiling of exporter with the option to downgrade the status of the applicant Category as per %age of export or export history Category A Category Allocation due to poor profile for a period of one year. Category B1 Category B1 Category C1 Category B2 Category C2 Category C1 Category C2 Category C2 No Authorization 3. Option to reduce authorization in case of poor performance for two consecutive years 4. Permanent blacklisting of directors/owners for trade in case of fiscal fraud in WeBOC and Sales tax 5. Criminal proceedings as per law in case of fiscal fraud, unauthorized removal of raw materials
Audits Audits Category A Manufacturers (Above 60% exports) Category B Manufacturers (below 60% exports) Category C: Indirect Exporters/ commercial Exporters Audit by PCA at least at least once in 3 years unless, randomly selected by PCA risk assessment Contract Based Common Export House Audit by PCA at least once in 5 years unless, randomly selected by PCA risk assessment Audit by PCA at least once in 4 years unless, randomly selected by PCA risk assessment Audit by PCA at least at least once in 3 years unless, randomly selected by PCA risk assessment Annual Stock taking by the regulatory Collector
All approvals under various export promotion schemes, if otherwise in order and correct, can remain operative for two years No restriction on immediate voluntary transfer to EFS 2021 Saving Clause Saving Clause Simultaneous operation under previous schemes or EFS 2021, not allowed.
Toll Manufacturing Toll Manufacturing 1. An exporter holding a contract for Toll manufacturing may import input goods directly or indirectly from the foreign principal without involving any remittance of foreign exchange. 2. The exporter shall provide an NOC from State Bank of Pakistan that there is no requirement of EIF against the input goods. 3. After the production of the output goods the exporter shall export the goods on submission of an NOC by the State bank of Pakistan for Export without an E-Form along with confirmation that service fee has been repatriated to the exporter in foreign currency as per contract.
Common Export house Common Export house The license shall be issued for a period of three years, revalidation for successive periods of three years For import goods declaration shall be filed with the name and NTN of the licensee as importer, Removal of input goods to the SMEs, indirect and direct exporters shall be done on the filing of an ex-bond goods declaration giving the name of the buyer. WeBOC to debit authorized quantity from the account of the Common Export House as well as the buyer. Retention Period three years Re-export of unsold goods allowed Permission to sell goods in domestic market on payment of duties and taxes and surcharge @KIBOR Plus 3% after three years
Application to the Collector 1. Applicant to submit online application on the designed format. 2. Data Verification from NADRA, SECP and FBR 3. Option to attach documents. 4. System to issue unique identification number to each application for authorization
Initial Scrutiny by Collector Collector/ Additional Collector To confirm that: In case of manufacturer-cum-exporter it has minimum 10% value addition Is the application Contract based, performance based or both? iii. He has seen the performance and it is commensurate with the required deferred value of duty and taxes. iv. He has seen the Contract and it is commensurate with the required deferred value of duty and taxes. v. In case application is based on more than one contracts he has seen all the contracts vi. He has seen the Agreement for Toll manufacturing & it is commensurate with the required deferred value of duty and taxes. vii. For supplies against international tenders, he has seen the document for award of contract to the applicant. viii. The Collector shall Categorize the applicant as per the categorization given in the rules. with reasons to be recorded ix. List of required documents to be checked by the Collector x. Visit of the unit done by team of Collectorate. i. ii.
Processing of Application By Collector i. Collector to receive the Application in the inbox. ii. Collector can assign the application to Additional Collector for profile review of the applicant. iii. Collector and Additional Collector to have access to user profiles in WeBOC. iv. Collector to approve or reject the application in 7 days or refer the case to Director IOCO. v. In case Collector fails to process the application in 7 days, system based provisional permission on the basis of declared Input output ratios and wastages to be granted and a message and in this regard shall be sent to the Chief Collector Concerned through WeBOC. vi. Option for Collector/Additional Collector to upload authorized value in the WeBOC system. vii.Option for Collector/Additional Collector to upload Input/output ratios and wastages in the Central IOCO database viii.Option to create Analysis Certificate in the system, compatible with the format of the IOCO Database ix. Special status of the application requiring special processing with reasons to be recorded
Processing of Cases Referred to IOCO i. Receipt of Application by the Director IOCO in his inbox ii. Receipt of profile report from the Collectorate. iii.Visit Report by IOCO team or team by the Collectorate or a third party, showing total production capacity of the unit etc. iv.Determination of input-output ratios in the format of Analysis certificate to be uploaded in the IOCO database. v. Appeal against the Analysis Certificate to the DG IOCO
Uploading of Authorized value of duty and taxes to be deferred in WeBOC i. Authorized value of goods allowed import on deferred duty and taxes as input goods to be uploaded for a maximum of five years on yearly requirement basis. ii. System will not allow the User to exceed the authorized value of goods for the year.
Amendment, suspension or cancellation of the Authorization i. Collector can amend suspend or cancel the authorization granted for a year at any time. ii. Amendment suspension or cancellation can be done on request of the user which has to be decided within 10 days. iii.Collector can initiate action for cancelation and suspension of the authorization on his own for reasons to be recorded. iv.Option for Collector to issue show cause in the system to the user.
Actions to be performed by the user: i. Option to create an application for new authorization. ii. Option to create an application for amendment, suspension or cancellation of the authorization. iii. Application to dispose of plant and machinery acquired. iv. Option to add input goods acquired locally against zero rated sales tax or FED invoice in the WeBOC System against his authorization number with invoice number and date with description and quantity acquired. v. System to deduct the value from the authorized value of input goods with description and quantity acquired. vi. Option to add duty and taxes paid input goods against sales tax invoice in the system with Invoice number and date with description and quantity acquired vii.In case the date on the invoice is older than 32 days system shall not allow feeding of the invoice or the quantity or value
Profile of Exporter i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii. xiv. Date of Registration Date of first export Items exported in last two years Vendors used. Indirect exporters used. Total value of goods imported under the scheme Total value of domestically acquired goods against zero rating Total value of duty & Taxes paid input goods Total value of Exports in two financial years Recovery generated by Collectorate. Recovery generated by PCA. Contravention cases framed. Contravention cases adjudged. Criminal Cases initiated
