November 16, 2002	Saturday	Ramazan 10, 1423

ISLAMABAD, Nov 15: The government has allowed exporters to claim refund of sales tax paid on gas and electricity used in the manufacturing of exported products listed under the Duty and Tax Remission for Export (DTRE) regime, aimed at boosting exports.

This was announced in the much awaited revised DTRE rules by introducing amendments in the customs rules, 2001, through a customs notification issued on Friday.

The sales tax refund would be calculated to the extent of proportionate consumption thereof in the production of exported goods.

The exporters were warned that in case the inputs whether imported or locally purchased not consumed within 18 months would be subjected to payment at the rate of 2 per cent per month of the value of unfulfilled exports.

And in case an exporter failed to give proper and documented account of duty and tax free input goods or of the unexpected finished goods manufactured therefrom to the auditors at the time of audit, the exporter would be required to pay the duties, taxes and penalties leviable on such goods.

Under the revised rules, the government has also allowed the exporters to dispose of unutilized input goods other than banned items, in local market on payment of surcharge in addition to the duties, taxes and payment under rule 298.

According to the notification, no surcharge would be charged on less than 10 per cent unutilized input goods; surcharge at a rate of 1 per cent of the fob value will be charged on 10 per cent to less than 20 per cent of unutilized input goods; 2 per cent of the fob value unutilized exports on 20 per cent to less than 30 per cent of unutilized input goods and 3 per cent of the fob value of unutilized surcharge on more than 30 per cent of unutilized input goods.

Moreover, the exporters might also dispose of the banned unutilized input goods subject to the approval of the ministry of commerce on payment of surcharge as notified in addition to the leviable duties, taxes and payment under rule 298 and on conditions prescribed by the ministry of commerce in this regard. An exporter might sell his admissible wastage in the local market on payment of sales tax leviable thereon.

Similarly, exporters might sell their B-grade products and factory rejects only up to 10 per cent of the exports as per contract under rule 297 on payment of duties and taxes leviable on the finished goods in addition to the surcharge as per rule 298 subject to the provisions of the import policy order.

The other amendments introduced in the customs rules were that a DTRE approved exporter might procure imported input goods free of duties and taxes from a DTRE approved person on approval from the collector of customs granting DTRE approval to the exporters.

The approved exporter might apply to collector of customs for amendment in the previous approval or for its cancellation, which should be allowed within 10 days of receipt of such request or application.

At the time of applying for DTRE approval, the exporter already having with him duties and taxes paid raw materials and finished goods inventories at their premises, should declare the same to the DTRE approving authority.

The exporter might transfer his duty and tax free input goods to another DTRE approved exporter of the same goods. The input goods so obtained shall be utilized as per rule 298.

Under the rules to give more concession to the exporters under the DTRE regime, the time period of keeping business records was extended to five years from three years after the export of the finished goods.

Furthermore, the period of post exportation audit was also extended to 12 months from three months.

As a result of post exportation audit, if there arises any discrepancy, irregularity or any violation of the rules by the DTRE approved exporter, the same should be reported to the adjudicating officer empowered by the CBR for adjudication in this regard.

Direct exporter making an application under this chapter in the form as set out in appendix 1 shall enter the approval number of application of a direct exporter with whom he must have a valid contract.

On approval, the indirect exporter shall have the same duty suspension privileges as the direct exporter within the duty suspension allowance of the direct exporter. The direct exporter, entitlement to duty suspension shall be reduced to the extent to the entitlement of the indirect exporter.