GOVERNMENT OF PAKISTAN
COLLECTORATE OF CUSTOMS (PREVENTIVE)
CUSTOM HOUSE, KARACHI.
No. S I/M ISC/20/87/EXP Dated: 30-01 -1990
STANDING ORDER NO. 07/1990 (PREVENTIVE)
SUB: PROCEDURE FOR SURVEY IN CONNECTION WITH FIXATION OF RATE OF DUTY DRAWBACK.
In terms of existing order of the Board the parties seeking fixation of rates of drawbacks in respect of export goods should apply on a prescribed form to the Chief. Rebate and Industrial Survey Central Board of Revenue, Islamabad, and a copy of the same application is also required to be simultaneously sent to Custom House Karachi, in where jurisdiction on the applicants unit it located.
2. The Central Board of Revenue on receipt of application of survey for fixation of duty drawback rates will carry out necessary scrutiny of the documents submitted by the party and on its satisfaction forward the application to the Custom House for survey and recommendation or rates of duty drawback alongwith a letter of acknowledgement incorporating the date of receipt of application.
3. On receipt of the said letter from Central Board of Revenue the survey section of the Custom House will immediately enter the particulars of the case in their survey register and at the same time incharge of the section will mark the case to survey officer.
4. The survey officer will open a file and will assign a file number thereto. He will study the documents and will ensure that all the required information with regard to raw material, imported as well as local, proposed fob value of goods to be exported, etc., has been supplied and will proceed for survey.
5. On an appointed date and time preferably within 7 days of receipt of Board’s letter mutually agreed to by the survey officer and the party, the S.O. will visit the unit and will see and verify the following:-
i) Actual description of different raw materials which are used;
ii) Actual quantity of each individual raw material consumed alongwith the quantity of wastage, if any;
iii) In relation to sub-para (ii) above the quantities of local inputs or local substitutes of imported inputs be separately inputs be separately indicated;
iv) The actual quantities of all the inputs be compared with one unit of the finished product, if possible;
v) Actual incidence of duty and taxes as indicated by the party on work sheet is verified and discrepancies/ observation be recorded thereon at the time of survey.
vi) The S.O. should ensure that all the raw material used in the manufacture of the finished goods are “imported” and their indigenous substitute is not available. In case local substitute of any of the raw material is available, the incidence of taxes in relation to such raw material should not be included in the commended drawback rates.
vii) It may also be seen by the S.O. whether there is a choice using raw material of any other grade in place of a high-grade raw material declared by the party. If use of cheaper/different grade raw material makes no significant difference in the standard and quality of the product, the incidence of taxes involved o the raw material of cheaper grade should be included in the recommended drawback rates.
viii) Survey officer should also see that imported raw materials are used in their original ‘virgin form. In case residue or waste I recycled the incidence of taxes involved on such raw material should not be included in the recommended drawback rates.
ix) In case of manufacturing process input, output of one batch should be taken into account. Where this is not possible and the process in continuous the performance of the unit i.e. (i) usage of different raw materials and (ii) Quantity of products obtained in a given period may be taken into account. For this purpose one or more specific periods with some intervals may be considered. In such cases daily raw material register/record and production list may be taken as basis for arriving at some conclusion.
x) Survey officer must also compare the finished products obtained at the time of survey with those already in the stock in order to see if there is any difference in the standard and quality of the two. If so this point must be brought on record and party may be asked to explain the discrepancies, if any.
xi) The survey officer should also take into account wastage which occur as dead loss and not recycled in the manufacturing process. Sufficient reasons be recorded for the amount of waste which is to be allowed/recommended.
6. After completion of survey a report containing the details of the manufacturing process and observation thereon is written and a fresh work sheet be computed. For this purpose C & F values of raw materials as declared by the party are required to be updated after necessary confirmation from the Appraisement Collectorate in writing or ITP values be obtained from the office of Controller of Customs Valuation.
7. While computing the work sheet, survey officer should also get confirmation of correct P.C.T. headings and rate of taxes currently available on the raw materials. For this purpose advice is obtained from the concerned group of Appraising Collectorate, in writing.
8. If the rates of duty taxes have undergone changes during the intervening period of filing of application and survey for the fixation of rates following action be taken.
(i) In case the party has made shipments after filing of application two worksheets will have to be prepared; one at the previous rate of taxes and the other on the current and prevailing rate of taxes. Effective dates on each work sheet should be indicated.
(ii) In case the party confirms in writing that they will make shipments after the survey, only one work sheet is prepared on the basis of prevailing and current rate of taxes.
9. When the work-sheet indicating incidences of taxes are complete, the duty drawback rates are linked with the FOB values of the product. However, specific drawback rates i.e. rates per weight basis or per piece basis should also be calculated. This should particularly be done in cases where the partly has claimed drawback rates on weight or as per piece basis.
10. On completion of the survey formalities a final report is be prepared containing recommended rates of drawback along with work sheet duly signed by the survey officer and A.C. survey and be put up to collector onward transmission to the Boards.
11. In an individual case of survey the final report should be completed and sent to the Board within one month after the receipt of application in the Custom House. This period of one month is subject to response from the party to arrange for immediate survey. In case the party fails to arrange for survey and no response is received after three consecutive survey notices are served each with an interval the case be closed under intimation to Board.
Signed by
(JEHANGIR KHAN)
COLLECTOR
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