ISLAMABAD: The Federal Board of Revenue (FBR) has said that Rs21.3 billion collected as Special Customs Duty (SCD) during fiscal year 2023-24 remains unreconciled with the Accountant General of Pakistan Revenue (AGPR) due to prevailing ambiguities.
The FBR reported that the total Customs Duty collection of Rs1.1 trillion includes Rs21.3 billion as SCD. This duty was initially imposed as an Export Development Surcharge (EDS) under Section 11 of the Finance Act 1991 (Act XII of 1991) and later revised through an SRO issued by the Ministry of Finance, Revenue Division, on January 4, 2003.
Traditionally, the FBR reconciled SCD collections with AGPR under account head B-02203 (Receipts).
However, amendments introduced by the Finance Act 2022 to the Export Development Fund (EDF) Act 1999 mandated that “whole receipts of Export Development Surcharge” be directly transferred to the EDF account by the State Bank of Pakistan (SBP). This procedural change created confusion, resulting in non-alignment of figures between FBR and AGPR.
The Finance Division, through a letter dated January 25, 2024, directed FBR and AGPR to resolve the reconciliation issue. However, discrepancies persist, and correspondence between the departments continues to address this matter.
The Special Customs Duty plays a crucial role in supporting export development initiatives. Despite its integration within the larger Customs Duty framework, the lack of clarity in its allocation and reconciliation has raised questions about transparency and efficiency in managing these funds. Experts highlight that without resolving this issue, the intended impact of SCD on national export goals may be undermined.
Efforts are underway to ensure that accurate reconciliation processes are established to maintain the integrity of Customs Duty collections.
Resolving the ambiguity surrounding the Special Customs Duty is vital for enhancing fiscal accountability and ensuring its effective contribution to export development programs.
