FBR Revamps Export Finance Scheme, Stricter Rules and Compliance Checks

The Federal Board of Revenue (FBR) has rolled out major modifications to the Export Finance Scheme (EFS) to prevent misuse and enhance efficiency.

On Friday, the FBR issued SRO301(I)/2025, revising the Customs Rules, 2001, and implementing key changes to the EFS. One of the notable updates includes the removal of the Export Facilitation Scheme (EFS) 2021 for importers of iron and steel scrap.

Additionally, the security prerequisites for EFS eligibility have been tightened. Manufacturers-cum-exporters with exports exceeding $20 million in the last two years are now mandated to provide an indemnity bond and post-dated cheques (PDC).

For those with exports below $20 million, the bond and PDC amount must be equivalent to their average annual duties and taxes on exported input goods over the past two years. Moreover, if deferred or remitted duties and taxes exceed this threshold, a bank guarantee or revolving bank guarantee will be compulsory.

The FBR has also implemented strict compliance measures—companies with outstanding recoveries, criminal charges, or poor compliance records will have their EFS authorization immediately suspended. Additionally, failure to submit reconciliation statements or comply with stock audits will lead to suspension.

Further revisions include a shortened input utilization period, a production-based input authorization system, mandatory bank guarantees instead of insurance guarantees, and new vendor controls to regulate supply chains. Enhanced monitoring protocols will ensure imported raw materials are exclusively used for exported products.

Under the new rules, input goods must be utilized within nine months, with extensions granted only in exceptional cases upon approval by an FBR-formed committee. For exports linked to international tenders or exempted projects within Pakistan, declarations must be filed via the WeBOC system.