ISLAMABAD: The Finance Division has transferred Rs 4,638.431 million to the Export Development Fund (EDF) during the last five fiscal years. This amount had been collected under Export Development Surcharge (EDS) which was levied on exports @ 0.25 percent of the export value vide Section 11 of Finance Act, 1991.
Presently, the same is being collected under SRO 10(1)/2003 dated 04-01-2003. Collection of EDS was entrusted on the State Bank of Pakistan which authorized all scheduled banks to deduct the EDS upon realization of export proceeds. “The rate of levy of EDS @ 0.25 percent remained unchanged during the past five years,” official sources at the Federal Board of Revenue (FBR) told Customs Today.
The year wise break-up of the transferred amount reveals that maximum amount Rs 1,281.378 million was transferred during the fiscal year 2015-16 and minimum amount was released Rs 479.134 million during fiscal year 2014-15.
The second biggest amount was released during the fiscal year 2011-12 and total amount released this year was Rs 1,279.810 million. Similarly, Rs 845.494 million were released in FY 2013-14 and Rs 752.614 million were provided in the fiscal year 2012-13.
The source added that in January 2003, then Central Board of Revenue (CBR), currently FBR, through a notification announced levying of export development surcharge on exportation of all goods, except the goods exempted from the EDS as notified by the federal government time to time. EDS was levied under section 25B of the Customs Act 1969 and State Bank of Pakistan was authorized to further authorize the scheduled banks to collect EDs.
It is pertinent to note here that exporters have been demanding immediate withdrawal of EDS, terming it as a major hurdle in the exports enhancement.
As per act all funds collected on account of EDS are supposed to be credited to Ministry of Commerce (MoC) account on first day of each fiscal year (July 1). But unfortunately, over last several years the Ministry of Finance (MoF) is not transferring the funds collected against EDS into MoC account.
Consequently, EDS liability is pending with MoF and as a result the exporters who are being directly taxed are not benefiting from the fund because they are not available with the ministry.
