The Federal Board of Revenue (FBR) has implemented significant amendments to the Export Finance Scheme (EFS) to curb the misuse of the facility.
The modifications, introduced through SRO301(I)/2025, revise the Customs Rules, 2001 and primarily target importers of iron and steel scrap, among other measures.
These changes aim to enhance compliance, tighten security requirements, and ensure efficient utilization of input goods in the export sector.
Withdrawal of Export Facilitation Scheme (EFS) 2021 for Iron and Steel Scrap Importers
A key change under the new regulations is the withdrawal of the Export Facilitation Scheme (EFS) 2021 for importers of iron and steel scrap. The government’s move aims to prevent the misuse of duty and tax exemptions granted under the scheme.
The FBR has introduced stricter security requirements for manufacturers-cum-exporters applying for the scheme. The eligibility criteria are now categorized based on the export performance of businesses over the last two years:
To ensure strict compliance, the FBR will suspend the authorization of users with a history of non-compliance. The criteria for suspension include:
- Pending recoveries or outstanding dues
- Involvement in contraventions or violations of customs rules
- Ongoing criminal proceedings
- Failure to reconcile statements or discrepancies found in stock audits
Any exporter falling under these categories will face immediate suspension, pending an opportunity to present a defense.
New Procedural Reforms for Enhanced Efficiency
The revised Export Finance Scheme includes several key procedural changes to enhance transparency and efficiency. These reforms include:
Regulatory bodies will withdraw samples from imported raw materials to verify their utilization in exported goods, preventing fraudulent claims.
Exporters supplying goods against international tenders or exempt projects within Pakistan must file a declaration in the WeBOC system to ensure transparency.
The amendments to the Export Finance Scheme (EFS) will have significant implications.
Stronger Oversight on Input Utilization: The nine-month utilization period will require businesses to manage efficient production planning to avoid penalties.
By tightening regulations, the FBR aims to increase revenue collection from defaulters and prevent revenue losses due to fraudulent claims.
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