KARACHI: The Federal Board of Revenue (FBR) has initiated consultations to strengthen monitoring of dyes and chemicals imported under the Export Facilitation Scheme (EFS) following concerns that duty- and tax-concessionary imports may be diverted to domestic markets instead of being used for export production.
FBR Chairman Rashid Mahmood Langrial took notice of concerns raised by the Pakistan Chemicals and Dyes Merchants Association (PCDMA) and directed Customs Export to engage with the association on measures to prevent potential misuse of the scheme.
At a meeting held at Customs House Karachi, Customs officials and PCDMA representatives agreed on the need to develop an effective monitoring mechanism to ensure that imported raw materials are used by their designated industries.
The association said imports of dyes and chemicals under the EFS had increased without a corresponding visible increase in exports, raising concerns about possible diversion to the local market.
It particularly highlighted textile dyes, including reactive dyes classified under PCT 3204.1600, and chemicals covered under Chapters 28 and 29 of the customs tariff.
The PCDMA called for reviewing the quantities of raw materials imported by industries against their actual consumption to determine whether the imports were being used for their intended purposes.
It also proposed linking import permissions under the EFS to a consumption-based formula and corresponding export volumes.
The two sides exchanged import-related data and discussed introducing transparent audits and improved administrative procedures to monitor the utilisation of raw materials.
The association said these measures would help ensure that duty and tax concessions under the scheme supported export production rather than domestic sales.
The meeting was attended by Collector Customs Exports Afnan Khan, Deputy Collector EFS Waqar Ahmed, PCDMA Chairman Saleem Mukati, Senior Vice Chairman Shahid Bashir and other representatives of the association and Customs.
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