ISLAMABAD: The Federal Board of Revenue (FBR) has been taking a number of measures under a strategy to enhance export by raising gross production of value added good and finished products in the country.
These measures include issuance of SRO’s, reduction of duty, sales tax as well as customs duty as well as facilities offered to exporters especially in the form of prioritized payment of sales tax refunds.
A well placed source at FBR told Customs Today that in 2013-14, an SRO 809 was issued to give an incentive duty free import of textile machinery to importers. Moreover, exporters were given draw-back for local taxes and levies on textile products on FOR values and their enhanced export if increased beyond 10% (over last year’s export) at 4% on garments, 2% on made up and 1% on processed fabric.
The source further said that FBR lowered the rates of sales tax for exporters as well as introduced and expeditious refund system for manufacturers-cum-exporters. The system performed well and produced good results in the increased tune and value of exports especially exports of textile products.
The source said that the benefit of Drawback of Local Taxes and Levies Scheme remained available for the exporters in the fiscal year 201516. Export Refinance Facility was at 4.5% Long Term Finance Facility was at 6% (In November, 2015 the rate was further reduced to 5% and spinning and ginning were included along with continuation of incentive of duty free import of textile machinery.
The source said that five export oriented sectors namely leather, sports goods, surgical goods and carpets made part of zero rated tax regime from July 1, 2016. Now Federal Board of Revenue (FBR) has approved payment of all the pending sales tax refunds till April 30, 2017, whose refund payment orders (RPOs) have been approved by the concerned department and authority.
The source said that the existing scheme on Drawback of Local Taxes (DLTL), facility of duty free import of textile machinery and a number of other measures and offers had been kept intact for the current fiscal year (FY2016-17). Under these incentives, a huge amount Rs 11.82 billion has been paid to exporters since 2013-14 to 2015-16.
