Ministry
of Commerce implements the second component of the Trade Rationalization
strategy that was approved by ECC on 6th October, 2017, by issuing the SRO on
PM’s Export Enhancement Initiative improving upon the terms of the earlier
scheme. The first of the three-pronged strategy was implemented by issuance of
Regulatory Duties on imports of luxury and non-essential finished goods by FBR
on Monday.
The main part of the trade strategy
proposed by the Commerce Division was to improve the conditions of PM’s Export
Enhancement Package which was modified in consultation with the exporters and
the relevant Ministries. The earlier package provided for conditional duty
drawback scheme which would only allow such facility to exporters who export
10% more than the previous year. This made the competitive marketing difficult
for the exporters, as any performance less than that would make the facility
inaccessible. The exporters were demanding a continuation of previous year’s
package which gave duty drawback facility regardless of the increase in
exports.
The new version of the package
provides a hybrid scheme which provides 50% of the duty drawback to all the
exports of the eligible sectors regardless of the enhancement and 50% only on
10% enhancement.
The SRO binds the State Bank of
Pakistan (SBP) to clear the claims submitted by exporters’ Bank within 48
hours. The banks on their part will not take more than 15 days to verify and
submit the claims to SBP and will credit exporter’s account within 24 hours of
release of funds by SBP.
In order to encourage exporters to
target new and far-flung destinations for exports, the package provides 2%
additional Duty Drawback facility for exports to non-traditional destinations
in Africa, South America, Oceana, CIS countries and Non-EU countries.
The third component i.e. Import
Regulations will be covered by issuance of amended Import Policy Order by the
Ministry of Commerce which is also expected to be issued this week.
