S.R.0.152/2021.- In exercise of the powers conferred by section 219 of the Customs Act, 1969 (IV of 1969), section 50 of the Sales Tax Act, 1990, section 40 of the Federal Excise Act, 2005 and section 237 of the Income Tax Ordinance, 2001( XLIX of 2001), the Federal Board of Revenue is pleased to direct that the following further amendments shall be made in the Customs Rules, 2001, which, as required under sub-section (3A) of the said section 219, were previously published vide Notification No. S.R.O. 902(1)/2021, dated the 9thJuly 2021, namely:- In the aforesaid Rules, after Chapter XXXIX, the following new Chapter shall be added from the 141h August 2021, namely:-

873. Authorization for acquisition of input goods. — (1) Acquisition of input goods without payment of duty and taxes under these rules shall be granted based on:

(a) export performance for last two financial years; and

(b) firm contract of export.

(2) The applicant can apply for authorization based on both performance and contract basis simultaneously.

(3) An applicant having multiple contracts of export may apply for consolidated approval for all such contracts.

874. Categorization of exporters. - (1) For the purpose of this chapter exporters shall be treated as per the f011owing categories:

(i) Category A: Manufacturers-cum-exporters with 60% or above exports of their total annual production in last two years.

(ii) Category B: Manufacturers-cum-exporters with less than 60% total annual production being exported, this category shall be further subcategorized as under

1. Category Bl: Manufacturers-cum-exporters having more than 3 years of export history.
2. Category B-2: Manufacturers-cum-exporters having less than 3 years export history.

(iii) Category C: Indirect exporter, commercial exporters and international toll manufacturers

1. Category Cl: Manufacturers having more than 3 years history of supplying to direct exporters or export as commercial exporter or international toll manufacturing;
2. Category C2: Manufacturers having less than 3 years history of supplying to direct exporters or export as commercial exporter or international toll manufacturing.

(2) All existing users of any of export schemes issued under S.R.0 450(1)2001, dated 18.06.2001, Chapter XV, DTRE, S.R.0 327(1)2008, dated 29.03.2008, before issuance of these rules shall be eligible to be classified under the respective category, as the case may be, provided they have a good compliance record.

(3) Category A and B shall include all corporate, non-corporate large and small, and medium manufacturer-cum-exporters as the case may be

880. Acquisition of input goods.-

(1) A user shall be entitled to acquire input goods without payment of customs duty, Federal excise duty, sales tax, or withholding tax as per his authorization under these rules, all such acquisitions shall be retained in the manufacturing facility or premises of the user declared under these rules, namely:-

1. input goods may be imported free of duty and taxes on filing of a Goods Declaration giving number of the authorization granted;
2. local input goods liable to sales tax shall be supplied against a zero-rated invoice;
3. the input goods manufactured or produced in excisable premises shall be supplied

without charging federal excise duty, against a valid document prescribed under

the Federal Excise Act 2005, or the rules made thereunder; and

4. duty and taxes paid goods from the domestic market against sales tax invoice.

881. Acquisition of plant, machinery and spares.- (1) The user shall be allowed to acquire plant, machinery, equipment and spares required for the manufacture of output goods by the authorized user under these rules subject to authorization by the Regulatory Collector in WeBOC or PSW:

(2) The plant, machinery and equipment imported under sub rule (1) shall be retained

for a period of five years from the date of importation, whereas the retention period of spares

shall be two years from the date of importation:

Provided that the disposal of plant, machinery and equipment before the expiration of

five years shall be subjected to following reduced rates of duty and taxes leviable at the time of importation, namely:-

TABLE

Provided further that the disposal of spares imported under sub rule (1) before the expiration of two years shall be subjected to following reduced rates of duty and taxes leviable at the time of importation, namely:-

TABLE

889. Duty drawback of duty paid input goods.— A user shall be entitled to claim

duty drawback on the acquisition of duty paid input goods subject to the applicable duty

drawback notification only after full discharge of the liabilities and obligations under this chapter and that the f.o.b value for claiming such drawback, shall be the value excluding the duty-free value of input goods imported or acquired under these rules:

Provided that where a person is already in possession of stocks of duty-paid input goods,

he may declare at the time of seeking approval and use such stocks for the purpose of this rule, any such declaration may be verified by the Regulatory Collector or Director IOCO at the time of processing the application.

890. Refund of sales tax.— The user shall be entitled to refund of sales tax on the acquisitions of tax paid input goods including refund of Sales tax on electricity or gas or services utilized as input goods for the manufacture of output goods to be exported under these rules, as admissible under the Sales Tax Act, 1990

Sources:

S.R.O 957 (I)/2021, Federal Bureau of Revenue, dated 30^th July 2021

https://download1.fbr.gov.pk/SROs/2021821185755580SRO957(I)2021.pdf