FBR Moves to Curb Misuse of Export Import Concessions

The Federal Board of Revenue (FBR) has begun consultations on tightening oversight of dyes and chemicals imported under the Export Facilitation Scheme (EFS) amid concerns that goods brought in with duty and tax concessions may be diverted to local markets instead of being used to manufacture export products.

FBR Chairman Rashid Mahmood Langrial took notice of concerns presented by the Pakistan Chemicals and Dyes Merchants Association (PCDMA) and instructed Customs Export officials to consult the association on steps to prevent potential abuse of the scheme.

During a meeting at Customs House Karachi, representatives of Customs and the PCDMA agreed on the importance of establishing an effective monitoring system to ensure imported raw materials are consumed by the industries for which they are intended.

The association pointed out that imports of dyes and chemicals under the EFS had grown without a corresponding visible rise in exports, prompting concerns that some of these goods could be entering the domestic market.

Particular attention was drawn to textile dyes, including reactive dyes classified under PCT 3204.1600, as well as chemicals listed under Chapters 28 and 29 of the customs tariff.

The PCDMA proposed comparing the quantities of imported raw materials with industries’ actual consumption levels to establish whether the goods were being used for their approved purposes.

It also recommended determining EFS import permissions through a consumption-based formula linked to corresponding export volumes.

During the meeting, both sides exchanged import-related information and discussed the introduction of transparent audits and stronger administrative procedures to track how imported raw materials are utilised.

The association maintained that these measures would help ensure duty and tax concessions under the scheme benefit export-oriented production rather than domestic sales.

The meeting was attended by Collector Customs Exports Afnan Khan, Deputy Collector EFS Waqar Ahmed, PCDMA Chairman Saleem Mukati, Senior Vice Chairman Shahid Bashir, and other representatives from the association and Customs.