GOVERNMENT OF PAKISTAN (REVENUE DIVISION) FEDERAL BOARD OF REVENUE (CUSTOMS WING) C. No: S(7)EP/2019-Pt Dated: 7" May, 2021 1. President Pakistan federation of Chambers of Commerce & Industry Federation House, main Clifton Karachi, Pakistan 2. President Karachi Chamber of Commerce and Industry rat Rd, off: Shahrah -e- Liaquat, Karachi, Pakistan 3. President Lahore Chamber of Commerce and Industry 11-Shahrah-e-Aiwan-e-Sanat-o-Tijarat, Lahore Pakistan 4. President Faisalabad Chamber of Commerce & Industry Canal Road Faisalabad. 5. President Sialkot Chamber of Commerce & industry P.O Box 1870 Shahrah-e-Aiwan-e-Sanat-O Tijarat Sialkot City. . President, Islamabad Chamber of Commerce and Industry Chamber House, Aiwan-e-Sanat-o-Tijarat Road, Mauve Area, G-8/1, Islamabad, Pakistan. 7. President, Sarhad Chamber of Commerce & Industry ‘Chamber House, G.T. Road Peshawar, Pakistan, 8. The Multan Chamber Of Commerce & Industry Shahrah-e-Aiwan-e-Tijarat-o-Sanat, Multan fatron In Chief, All Pakistan Textile Mills Association (APTMA) Office No. 504(B) APTMA, Sth Floor, Evacuee Trust Complex, F-5/1, Agha Khan Road 10. Chairman, Pakistan Readymade Garments Manufacturing Association (PRGMEA) Plot No. 57-C, 3rd Floor, 24th Commercial Street, Phase II (Ext), DHA, Karachi, Pakistan 11. Chairman, Pakistan Association Of Automotive Parts And Accessories Manufacturers (PAPAM), 16-B, Westwood Colony, Thokar Niaz Baig, Lahore 2 SUBJECT: SIMPLIFICATION OF EXPORT PROMOTION SCHEMES Please refer to the subject cited above, it is informed that Board is undertaking ‘an exercise of simplification of export promotion schemes by developing a single unified scheme instead of Manufacturing Bond, DTRE schemes under SRO 459(1)/2001, SRO 326(1) /2008 and 327(1)/2008 and temporary Importation under SRO 492(1)/2009 2 ‘A draft text of the proposed scheme is being annexed with the request that comments and observations on the scheme may kindly be provided to the Board by 22" May 2021. N f 4} (Muhammad Daud Pirzado) No: 9555 _| Secretary Export Policy APTMA - PO} Tati Trade [Finance [| RECEIVED ‘ 47 MAY 2921 eeEXPORTER FACILI TON 1, Definitions: -in this chapter, unless there is anything repugnant in the subject or context, (a) () © @ © oO ) (h) (hy @ 0 “acquisition” means import or purchase of foreign origin goods from authorized exporter, common bonded warehouse or Public bonded warehouse, including banned or restricted items or procurement of locally manufactured goods and taxable or excisable services covered under this Chapter, also includes engineering goods as classified under chapter 72 to 96 or as approved by EDB. Acquisition of banned or restricted items shall be subject to prior permission from the Ministry of Commerce; "Acts" means the Customs Acts, 1969 (IV of 1969), the Federal Excises Act, 1944 (I of 1944), the Sales Tax Act, 1990 and the Income Tax Ordinance2001; “Appendix” means an Appendix to thisChapter; “applicant” means a person who files an application in the form set out in Appendix I for grant of export facilitation scheme under thisChapter; “Exporter” includes a person who has been approved for availing benefit under this schem “Engineering goods” includes goods classified under Chapter 72 to Chapter 96 of the First Schedule of Customs Act, 1969 or as approved by the Engineering Development Board (EDB) “export” includes supply ofgoods,— (by an indirect exporter to a directexporter; i) against internationaltenders; (ii) t0 projects or sectors entitled to import or purchase such goods free of duties and taxes;and (ix) to export processingzones,Special economic zones and gawadar free zone Direct exporters means a manufacturer cum exporter who is exporting the goods under the name of his firm or company, “indirect exporter” means a person who has a firm contract or export purchase order from a direct exporter for the manufacture and supply of goods to suchexporter; “input goods” means goods and includes services eligible for acquisition such “import” includes the purchase of input goods from an export processing zone or a private, public, or common bonded warehouse but excluding diplomatic bond. “Intemational Toll Manufacturing” means an arrangement wherein the foreign principal provides input goods to an exporter to produce finished goods for subsequent export against a prescribed fee&) oO (m) @ 0) ©) @ w (s) @ (u) o) (w) ) “Collector” means the Collector of Customs in whose jurisdiction the place of business or manufacturing unit of the applicant, duly registered under the Sales Tax Act, 1990, is located Utilization period” means the period commencing from the date of authorization to import to the end date mentioned in the authorization for export of output goods. “Analysis Certificate" means a digital certificate issued by the Director IOCO determining the input-output ratios and wastages in the manufacturing process. “common bonded warehouse” means a warehouse licensed by the Collector under rule ------ for warehousing customs duty, sales tax, Federal excise duty or withholding tax, free import of goods primarily meant for manufacture of finished goods by the Small & Medium Enterprises or indirectexporters; "indirect exporter" means a manufacturer or supplier of goods or articles which are to be used as input forexport; "manufacture" means any process incidental, or ancillary undertaken in the manufacturing of finished goods under thischapter "manufacturer-cum-exporter" means any person or firm registeredunderthe Sales Tax Act, 1990 as amanufacturer-cum-exporter "Small_and Medium Enterprise_means_an_export_unitregistered_by SMEDA or havingexportquantum up to two and half million US dollars perannum, Large Export enterprise means an export unit havingexportquantum above two and half millions US dollars perannum, Corporate Export Enterprise means an export unit registered with the SECP. User means a person authorized to utilize this scheme. "vendor" means a person who is registered under the Sales Tax Act, 1990, and to whom goods are provided by the licensee for further manufacture of goods; Public warehouse Insurance guarantee means a guarantee issued by an insurance company registered with the Ministry of Commerce and has a minimum PACRA rating of “AA” 2. Scope of the Scheme.-(I) The facility to import goods without payment of Customs duties, Sales tax, federal excise tax, and Withholding tax under this Chapter shall be availableto, (@) persons registered under the Sales Tax Act, 1990, asmanufacturer cum exporter (Direct Exporters) (b) manufacturers who act or intend to act as contracted vendors of foreign principal as toll manufacturers. (©) commercial exporters engaged in the purchase and export of goods in the same state either after packing orotherwise. (@) persons registered under the Sales Tax Act, 1990, asmanufacturer andoperating as indirect exporters or vendors for direct exporters (©) manufacturers including manufacturers of engineering goods who intend ‘to supply against international tenders. Provided this scheme shall be allowed for the export of goods authorized under the export policy order, incase of export of goods restricted or prohibited under the export policy order specific permission from the Ministry of Commerce shall be required. 3. Advance Authorization to import goods under the scheme. ~ (1) Advanced authorization to import goods without payment of duty and taxes under these rules shall be granted based on: (a) Export Performance for last 24 months o two financial years. (b) Firm Contract of export (2) The applicant can apply for authorization based on both performance and contract-based simultaneously (3) An applicant having mul application. le contracts of export may club the quantities into a single 4, Categorization of Exporters: (1) For the purpose of this chapter exporters shall be treated as per the following categories: (i) Category A:Manufacturers/exporters with 60% or above exports of their total annual productionin last two years (ii) Category B:Manufacturers/exporters with less than 60% total annual production being exported, this category shall be further subcategorized as under (a) Category BI: Manufacturers/Exporters ha history. 1g more than 3. years of export (b) Category B-2: Manufacturers/Exporters having less than 3 years export history (iii) Category C: Indirect exporter and Commereial exporters (2) Category C1: having more than 3 years history of supplying to direct exporters cr export as commercial exporter (b) Category C2: having less than 3 years history of supplying to direct exporters or export as commercial exporter (2) Category A and B shall include all corporate, Non-corporate large and small, and medium manufacturer cum exporters. (3) Exporters with a poor compliance profile, i.e. having one or more contravention case adjudged or pending against them or having pending recovery cases or criminal proceeding record shall be downgraded for a period of one year, as underCategory as per Yeage of | Category Allocation due to poor export or export history | profile for a period of one yea Category A Category BI Category BI Category Cl [ Category B2 Category C2 Category Cl Category C2 Category C2 ‘No Authorization Provided that contravention cases involving procedural issues or individually or collectively involving revenue less than five million Rs. shall not affect the categorization of the exporter. 5. Application for advanced authorization to import or acquire goods for export (1) Any applicant covered under rule (2) of this chapter and desirous of utilizing this facility may apply online in the WeBOC system as per the prescribed format given in Appendix I to this chapter. (2) The application shall be supported by the following documents: 1SO 9001 certification if available ii, Ownership or lease agreement of the manufacturing facility/business address for commercial exporter iii, Copy of contract/contracts or supply order in case of contract-based application and Toll Manufacturing: iv. Bank Statement for last two years or from the date of incorporation of the entity v. Summary of Foreign exchange realized through E forms. vi, Recommendation of respective Chamber of Commerce and Industry or Small and Medium Enterprise Development Authority (SMEDA) in case of Small and Medium exporters. 6. Security for Advanced Authorization (1) The applicant shall submit a security Instrument equal to the duty and taxes being remitted on the quantity demanded along with the application as detailed below: a) Category A: Indemnity bond and PDC b) Category Bl:Indemnity bond and PDC for manufacturer cum exporters with a self owned manufacturing facility and Revolving Insurance Guarantee for Manufacturer cum exporters with a rented production facility ©) Category B2: Revolving Insurance Guarantee for manufacturers with self-owned manufacturing facility, Revolving Bank Guarantee for Manufacturers with rented production facility till three years benchmark 4) Category Cl:Indemnity Bond and PDC for manufacturers with self-owned manufacturing facility, Revolving Insurance Guarantee for Manufacturers with rentedproduction facility and commercial exporters, ©) Category C2: Revolving Insurance Guarantee for manufacturers with a self-owned manufacturing facility, Revolving Bank Guarantee for Manufacturerswith rented production facility or commercial exporters tll three years benchmark 7. Processing of the Application for Import Authorization (1) The online application shall be assigned to the Directorate General of IOCO for determination of the Input-Output ratios and assessment of production capacity of the applicant within 30 days of the receipt of the application (2) The WeBOC system will intimate the regulatory Collector about the receipt of the application by the IOCO with details of the exporter. The Collector or an officer designated by him will conduct a profile analysis of the exporter. In case of a bad profile because of any contraventionor criminal proceedings in the past against the exporter, where charges framed have been established or the case is still pending or recovery is outstanding, The Collector will provide profile of applicant to the Directorate General of IOCO within 10 days of the submission of the application. Non receipt of any information by the Collectorate shall be construed as a good profile and case shall be processed by the 1OCO. (3) The IOCO shall commence processing of the case immediately and shall not wait for the report of the Collector. However, in case a negative report is received from the Collector, IOCO shall return the application for getting a clearance from the Collectorate and in such cases, the exporter shall be treated as per Rule 4 (3) (4) In case the IOCO fails to process the application within thirty (30) days. The system shall automatically allow 25% of the quantities demanded by the exporter, which will be reconciled once [OCO finalizes its assessment. Provided that the Director IOCO may block this option for applicants with poor sompliance profile (5) In the case of Contract based application, where the exporter so demands, 30% of the quantity demanded shall be allowed by the system at the time of submission of application Provided that the Director IOCO may block this option for applicants with poor compliance profiles. (6) The 1OCO after determining the Input/output ratios and production capacity of the exporter will issue a digital" Analysis certificate” showing quantities of input goods required for the manufacture of the output goods and the ratio of wastages. (7) The Director 1OCO shall upload the authorized quantities of input goods to be acquired by the exporter. IOCOmay reduce the demanded quantity according to the production capacity of the exporter. (7) Director 1OCOmay designate a team comprising of at least two officials to visit and determine the production capacity of the applicant. IOCO may also acquire services of any third party for determination of production capacity, input-output ratios, and wastages including the Engineering Development Board8, Determination of Input-output ratios and wastages.-(1) In the case of goods other than same-state goods, the input-output ratios and wastages under this subchapter shall be declared by the applicant in the application, (2) Tags and printed materials supplied by a foreign supplier without the involvement of foreign exchange from Pakistan shall be allowed to be imported without any quantitative restriction for the purpose of this Chapter. (3) The IOCO shall validate the input-output ratios declared by the exporter and may modify them according to its findings or sectoral benchmark (4) The OCO will establish a central database of all determination of input/output ratios and ‘wastages by it as well as by EDB on a sectoralbasis. (5) No case shall be referred to 1OCO or EDB, where the determination of input/output has already been done in a similar case by the [OCO or EDB and the applicant accepts those ratios. In such case permission shall be granted by the Director IOCO based on already approved Input out ratios and the information will be uploaded in the IOCO database. (©) No application shall be rejected without affording an opportunity of being heard to theapplicant. In case of rejection or disagreement with the input-output ratios or wastages determined by the Director IOCO, the applicant will have the right to file a review before the DG I0CO which may be decided within fifteen days. 9 Authorization to Import/acquire goods. — (1) On the basis of scrutiny of an application, The Director IOCO, shall upload the quantities of the input goods allowed to be imported or procured locally in the WeBOC system. (2) The import authorization can be issued for the maximum period as specified against each category in the table below ‘Category Authorization Period ] Category A. Five years Category BI Four Years Category B2 Two years Category Cl Four years Category C2 Two years (3) The import authorization shall be uploaded as per the annual production plan of the applicant. Authorization to import or acquire goods for the next year wherever applicable shall be triggered automatically upon submission of the annual reconciliation report by the exporter in the WeBOC. 10, Amendment, suspension, or cancellation of the approval, — (1) A user may apply to the Regulatory Collector for amendment (increase or decrease) in the previous approval or its cancellation and each such request shall be decided within ten days of receipt thereof and fed into WeBOC(2) No request for amendment in the existing approval shall be rejected and no approval shall be canceled without affording to the applicant or the user an opportunity of showing cause in writing and beingheard. (3) The Regulatory Collector may, on his own or otherwise, suspend any approval pending his decision to cancel such approval and each such suspension shall be fed into WeBOC. @) jon to any other action under the law, require the input goods already acquired or output goods produced under the suspended or canceled approval to be dealt with in such manner as he may deemappropriate. 11. Acquisition of duty-free input goods.- (1) A. user shall be entitled to acquire input goods without payment of customs duty, excise duty, sales tax, or withholding tax in accordance with his approval, and all such acquisitions shall be fed into WeBOC in the following manner,namely:— (a) if imported, the WeBOC system shall automatically debit the quantity (©) local input goods shall be uploaded by the user in the WeBOC system within seven days of acquisition.In case itis found out as a result of any information, audit, or snap checking by the regulatory collector or his designated officer or any formation of Customs that data has not been uploaded in the system in time, the exporter shall be liable to suspension or cancellation of the authorization besides any other action as provided under the law. (2) The input goods manufactured or produced in exeisable premises shall be supplied against a valid document prescribed under the Federal Excise Act 2005, or the rules made thereunder. (3) The Regulatory Collector may allow a user to utilize his duty and tax-free acquired input goods for his new approval if his previous approval has been canceled due to pre~ mature termination or cancellation of the export or supply contract of such input goods have been rendered surplus for any valid reason and each such approval shall be fed by the Collector into WeBOC. 12. Acquisition of duty paid input goods.— (1) 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 thischapter: 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 IOCO at the time of processing the application.13. Acquisition of locally manufactured input goods.— (1)A user shall be entitled to procure without payment of sales tax locallymanufactured input ‘goods and duty drawback shall be admissible in respect of duty paid input goods used in the manufacture of such goods at the rate given in the relevant duty drawback notification. (2) Where a registered person supplies goods to a user, he shall issue a zero-rated invoice under section 23 of the Sales Tax Act, 1990, mentioning the number and date of approval of thebuyer. 14. Acquisition of Plant, Machinery and Capital goods The exporter shall also be allowed to acquire plant machinery equipment and capital goods as are not manufactured locally. Provided that plant, machinery, equipment, and apparatus including capital goods imported shall be retained for a period of five years from the date of importation. Provided further that the disposal of plant, machinery, equipment, and apparatus 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 ‘St No Disposal period Duty and 1. U Taxes (GIF sold or otherwise disposed of before the expiration off Full li three years from the date of importation, (Gi) |Isold or otherwise disposed of after three and before four| 75% ears from the date of importation (Git) _|IF sold or otherwise disposed of after four and before fivel 50% ears from the date of importation (Gv) _|IF sold or otherwise disposed of after five years from the] 0% date of importation. moromes input goods.— (1) The input goods acquired under this chapter shall be utilized in the manufacture and export of output goods within the authorization periodor disposed of in a manner as prescribed in Rule 18 2) The user may remove input goods out of his premises for partial manufacture or processing by the vendor as declared in the application or after intimating the regulatory Collector, on this behalf. Provided that in case the manufacturing process performed by the vendor is liable to sales tax and/or federal excise duty, the processed goods shall be returned to the manufacturer in such manner as if these were exported without payment of sales tax and/or federal excise duty: Provided further that the output goods may be removed directly for export from thevendor to the customsstation. 16. Utilization p ‘The input goods acquired shall be utilized within the time-period from the date of authorization, prescribed as under: ‘Category I Utilization period Category A. 72 Months Category BI “48 Months: Category B2 | 24 Months Category CI [ 48 Months Category C2 24 Months 17, Export of manufactured goods.—A goods declaration filed for theexport of a consignment under this subchapter shall contain the approval number and shall be subject to all formalities for other declarations or endorsements if any, and the procedure in respect of processing and examination of export goods, for the time being in force, shall be observed. Provided that no bill of export or goods declaration shall be filed for the supply of goods against international tenders or to exempt projects or sectors in Pakistan: Provided further that supplies against international tenders or to exempt projects or sectors in Pakistan shall be reported by the user to the Regulatory Collector who shall enter the relevant particulars into WeBOC. 18. Procedure for International Toll manufacturing (1) Am exporter holding a contract for Toll manufacturing may import input goods directly or indirectly from the foreign principal without involving any remittance of foreign exchange. (2) The exporter shall provide an NOC from State Bank of Pakistan that there is no requirement of EIF against the input goods. (3) After the production of the output goods the exporter shall export the goods on submission of an NOC by the State bank of Pakistan for Export without an E-Form alongwith confirmation that service fee has been repatriated to the exporter in foreign currency as per contract, 19. Domestic Sales (1) Incase the user is unable to export the output goods, he shall be allowed to sell them in the domestic market subject to payment of duty and taxes and a surcharge of KIBOR Plus 3 % per annum if the domestic sale of the output goods manufactured from authorized quantity is less than 30% of the expected annual export as per exporters own declaration at the time of application, (2) Where the quantity of goods to be sold in the domestic market exceeds 30% of the expected annual exports as declared by the user at the time of application, the sale shall be allowed on payment of duty and taxes, surcharge at the rate of KIBOR plus 3 % (3) The user shall be allowed to sell B grade goods in the domestic market on payment of@ 6) 6) 20. QM 2) (6) () duty and taxes and filing of a goods declaration which shall be assessed as if imported as such, The user shall be allowed to sell the wastes on the domestic market on the filing of a goods declaration. which shall be assessed as if imported as such. In case the goods or input goods are banned under the import policy order, domestic sale of these goods shall be subject to the approval of the Ministry of Commerce. destruction after approval of the Regulatory Collector if goods are not fit for consumption or sale with remission of duty and taxes. Unused Input goods In case a user is unable to consume the input goods acquired before the end of the year, the same shall be debited from the quantity authorized for the next year Where the user is unable to export goods as per declared production plan for consecutive two years. The Collector may reduce the authorized quantity accordingly, for the remaining utilization period. The user may transfer unused input goods to other exporters specified under rule (2) before the end of the utilization period. ‘The user may sell the unused input goods in the domestic market on payment of duties and taxes, a surcharge of KIBOR plus 3%. Provided that banned or restricted goods shall be sold to the domestic market only if the Ministry of Commerce authorizes the sale. ‘The user may re-export un-used input goods if allowed under the export policy order. Destruction after approval of the Regulatory Collector if goods are not fit for consumption or sale, with remission of duty and taxes. Provided that where any of the above optionsare allowed, the Regulatory Collector shall reduce the equivalent quantity of output goods and input goods authorized, by feeding them into WeBOC, Provided further that in case of sale of input goods to the other user, the regulatory Collector shall debit the acquired quantity from the authorized quantity of the buyer by feeding it in WeBOC. 21, Un-exported finished goods. a) A user may transfer the un-exported finished goods to another exporter under Rule Q) of this chapter. (2) Sell the un-exported finished goods in the domestic market on the filing of a goodsdeclaration and payment of duty and taxes on the input goods plus a surcharge of KIBOR plus 3% (3) Destruction after approval of the Regulatory Collector if goods are not fit for consumption or sale with remission of duty and taxes. Provided that where any of the above optionsare allowed, the Regulatory Collector shall reduce the equivalent quantity of output goods or input goods as the case may be, by feeding them into WeBOC. 22, Refund of sales tax.— (1) Refund of sales tax ontaxable or excisableservices utilized as input goods for this scheme or inputs covered under rule 12 or in respect of goods supplied in terms of sub-rule (2) of rule 13 shall be admissible to a user or as the case may be, to a registered person as admissible under the Sales Tax Act,1990: (2) A user shall be entitled to get refund or adjustment of the Sales Tax paid on acquisition of electricity of gas used in the manufacture of export goods. The Sales tax to be refunded or adjusted shall be determined based on the annual reconciliation statement submitted by the exporter and refund or adjustment in the Sales tax payable in subsequent year, equal to percentage of exports out of total production shall be allowed. 23. Records and documents.A user shall keep and maintain separate from other business records if any, the following records and documents in a proper ‘manner,namely: (@) copies of applications and approvals; (b) records of acquisitions of input goods andexports; (©) record for destruction or another authorized disposal of input goodsand ‘output goods;and (@) export contracts or orders and supply contracts ororders. 24, — Reconciliation statement.— ‘The user shall submit an annual reconciliation statement showing the input goods acquired and output goods exported, domestically sold,and wastages and their disposalWithin 15 days of the end of the year. Failing which the WeBOC system shall not allow further imports or acquisition, On submission of reconciliation report, the WeBOC system shall automatically allow the quantity of input goods authorized at the time of application. 25. Audit.-(1) The Directorate of Post Clearance Au as under shall conduct an audit of the users a) Category A; once in five years ) Category B; once in Four years ©) Category C; once in three years 4) Contract based: once in three yearsProvided that the Directorate of Post Clearance Audit may conduct an audit of any exporter based on risk assessment, random selection for entity-based audits, on specific information, or on request of the regulatory Collector. @) Audit under this subchapter shall be a combined or consolidated audit for exports under the scheme and other taxable activities, if any, and shall cover all the duties and taxes for which the security instrument has been furnished. @) In case of a commercial exporter holding an approval for same-stategoods, the Regulatory Collector may discharge the security instrument if such exporter, on the basis of purchase and export documents in his possession, proves that the goods acquired by him against such approval have been exported infull. @ Where,as a result ofthe post-exportation audit, there arises any discrepancy, irregularity, or any violation of the provisions of this Chapter or any other law applicable on this behalf by the user, the same shall be reported to the adjudication officer of competentjurisdiction. ©) Where,as a result of the audit it is found and established after due process of law that the user is guilty of tax fraud, the user i.e., owner, proprietor, partners, or entity may be blacklisted for any trade by blacklisting the CNIC in the WeBOCsystem and for Sales tax by the Regulatory Collector. 26. Power to suspend the facility.~The Board shall have the authority to suspend, restri or cancel the authorization issued for any particular goods or class of goods by notification in the Official Gazette, 27. Miscellaneous.-(1) An officer authorized by the Regulatory Collector shall have free access to any place where goods covered under the authorization issued under this scheme are stored, processed or manufactured, or otherwise dealt with and to the records, documents, and information relating to suchgoods. (2) Alll liabilities or dues as and if payable or outstanding under any of the provisions of this sub- Chapter shall be finally ascertained and recovered by the Regulatory Collector. 28. Saving-(1) All approvals under various export promotion schemes, if otherwise in order and correct, substituted by this Chapter shall remain operative till the expiry of utilization period, and request for renewal applicationshall be filed under these rules by the exporter. Sub Chapter -II Common Bonded Warehouse 29, Applicability: ‘These rules shall apply to the clearance of imported input goods as are importable under the Import Policy Order for the time being in force including banned or restricted items of thesaid order for supplying goods for export by small and medium enterprises (SMEs) and indirect exporters. 30. Licensing.--(1) Any person desirous of operating a common bonded warehouse shall apply to the Collector of Customs in the form set out in Appendix I to these Rules alongwith the following documents, namely: (@) Application form (b) ISO 9000/1400 or any other quality assurance Certification if available (©) the site plan of the proposed common bonded warehouse indicating the location of the premises and the details of the total area and covered area. (©) Bank Statement of the applicant for the last two years; orfrom the date of incorporation (d) Memorandum and Articles of Association in the case where the applicant is registered under the Companies Ordinance, 1984 (XLVII of 1984), or partnership deed if it is a partnership firm; () ownership documents or lease or tenaney agreement (h) comprehensive insurance policy covering all risks such as fire burglary, etc, issued by an insurance company registered with the Ministry of Commerce, in the sum equal to the amount of customs duties and sales tax involved on the imported input goods intended to be stored in the common bonded warehouse; (2) On receipt of an application alongwith the documents prescribed in sub-rule (1), the Collector of Customs, after such verification as he deems necessary, issues a license within one month of such verification to the applicant to operate a Common Bonded Warehouse. Provided that a public warehouse already operating under these rules may also apply to operate as a common bonded warehouse simultaneously. 31. Cancellation of license.--The license may be canceled by the Collector of Customs ‘on conviction of the licensee for any offense under any of the Acts or non-utilization of the license or on the request of the licensee, in writing, 32. Suspension of license.--(1) Pending consideration whether a license is canceled under Rule 3, the Collector of Customs may suspend the license if he is of the opinion that it is expedient to do so and for the reasons to be recorded, in writing, by him. (2) In a case referred to in sub-rule (1) the reasons for such suspension shall be communicated to the licensee within twenty-four hours of such suspension. During this period the Common Bonded Warehouse shall continue to operate, for the goods already supplied to exporters or in the pipeline under the supervision of an Assistant Collector of Customs so that the exports and exporters do not suffer. 33. Revalidation or revival of license.—The license shall be issued for a period of three years and the same shall stand revalidated for successive periods of three years by the Collector of Customs without further application thereof by the licensee provided theCollector of Customs is satisfied that no action under the Acts is pending against the licensee or the licensee himself has applied to the Collector of Customs for revoking his license. 34. Import of input goods.--(1) For import of input goods into a Common Bonded Warehouse a goods dectaration shall be filed with the name and NTN of the licensee as importer, The GD shall be processed as per procedure applicable for clearance into the public bonded warehouses under the Customs Act, 1969 (IV of 1969). 35. Removal of input goods from Common Bonded Warehouse, Removal of input goods to the SMEs, indirect and direct exporters shall be done on the filing of an ex-bond goods declaration giving the name of the buyer. The WeBOC system shall debit the authorized quantity from the account of the common bonded warehouse as well as the buyer. 36. Re-export of imported input goods.-(1) The licensee may be allowed to re-export input goods imported for manufacture of export goods under these rules in their original and ‘unprocessed form within three years of their import subject to the limitations and restrictions of Import Policy Order and Export Trade Control Order for the time being in force. 37. The retention period for the procured input goods.-(1) The licensee shall supply the input goods to the SMEs and other exporters within a period of three years from the date of importation. 2) Warehousing surcharge payable under section 98 of the Customs Act, 1969 (IV of 1969) shall not be payable for a period of three years in respect of input goods referred to in sub- rule (1). 38. Transfer of ownership or title--The licensee shall not be allowed to transfer the ‘ownership or title of the common bonded warehouse unless all outstan central excise duty, sales tax, and income-tax are paid and any other 39 Unaccounted Input goods.~If any licensee fails to give a proper account of the input goods to the satisfaction of an officer of customs not below the rank of an Assistant Collector, the licensee shall pay on demand an amount equal to the customs duty, federal excise duty, sales tax and income-tax leviable thereon as if they were imported and used for home consumption plus surcharge at the rate of KIBOR plus 3% and shall also be liable to penalties imposed for such violation under the Acts. 40. Destruction of input goods.--Any imported input goods that are rendered unfit for consumption or sale may be allowed to be destroyed by an officer of customs not below the rank of an Assistant Collector, in such manner as the Collector of Customs may, by order in writing specify. 41. Reconciliation report. The Common bonded warehouse operator shall submit a monthly reconciliation report in WeBOC showing complete details of goods imported and sold and stock position.Sub-chapter IIT ‘Temporary Import shall be available to exporters also registered as manufacturers under the Sales Tax Act 1990 the importer shall make an application for grant of exemption to the Collector of Customs, giving full particulars of the goods and the purpose for which, they areimported, Provided where an applicant so desires, he may apply forexemption for a period of three years showing approximate annual required quantities of the goods to be imported temporarily and the Collector shall feed the quantity and value of the PDC in the WeBOC system, which shall be debited after each import. the importer shall submit an indemnity bond along with a post-dated cheque equivalent to the amount of customsduty and sales tax otherwise leviable thereon; the importer shall export temporarily imported goods after due processing thereof within eighteen months of their import. On a request from the importer, the Collector concerned shall allow an extension for six months. The Board may consider any further extension in exceptional circumstances on such terms and conditions as may be deemed appropriate in thematter. only such goods, except the goods specified at serial No.2of the Table, as are capable of identification at the time of their re-exportation, shall be exempt from the aforesaid customs duty and salestax; packing material, as mentioned in the Table at serial No.10, maybe imported empty and exportedfilled; at the time of importation of goods, the importer shall makea written declaration on the goods declaration to the effect that the goods are imported for the purposes of thisnotification; after ascertaining the correctness of description, classification, and importability status of goods at the time of import, the same shall be assessed to value in accordance with the values determined for identical goods cleared for local consumption for the sake ofuniformity; at the time of export, the exporter shall make a declarationthat the goods were imported for the purposes of this notification, giving particulars of import documents (IGM No. & date,G.D. No. & date, Cash No. & date, etc.);10. ML 13. 14. 15. 16. 19, 18, the export shall be processed subject to profiling by the risk management system, the Assistant Collector or the Deputy Collector, incharge of the export station, may ‘examine goods being exported in case of specific information regarding the misuse of the facility with the permission of the Collector and, findings of the examination shall bbe uploaded in the system. immediately after the re-exportation of goods, the applicant may produce evidence to the Collector of Customs concerned that the goods have been re-exported within the stipulated period. On production of such evidence/declaration, bank guarantee, pay order, or the indemnity bond along with post-dated cheque submitted at the time of import shall be released. For regular manufacturers-cum-exporters, on the export of the consignment, the WeBOC system shall credit an amount equal to the value of the temporarily imported goods used in the goods exported to the account of the importerfor subsequent imports. transfer of ownership of temporarily imported goods may beallowed by the Collector of Customs, or the Additional Collector of Customs concerned, at his discretion, subject to the transfer of title of indemnity bond along with post-dated cheque submitted at the time ofimport: in cases where temporarily imported goods are used in addition to other imported raw materials on the import of which duties and taxes have been paid and repayment is, admissible on the export of ultimately manufactured products, the f.o.b. price for claiming such repayment shall be the value excluding value of the goods temporarily imported under thisnotification; only such operations as are listed in the Table shall be carried out with the inputs and raw materials imported under this notification; exemption under this notification shall not be allowed in cases in which physical inspection of manufacturing becomes necessary for the purposes of suchexemption; all the existing licenses and those issued under Chapter XV of the Customs Rules, 2001 shall be deemed to have been issued with immediate effect till the validity of existing licenses already issued. All liabilities of the said licensees shall be deemed to be their liabilities under the said rules; and the Collector of Customs, or the Additional Collector of Customs, may refuse entry of any goods without payment of customsduty and sales tax if prima facie it appears to him that such entry is in violation of any of the conditions of this notification. Appendix I An application under condition (i) shall be submitted in the following format,namely:—FORM Name of the unit withaddress N.T.N.No. Sales Tax RegistrationNo. Station of import. Value of goods exported inthe previous financial year Description of importedinputs Description of goods to beexported Input and output ratio of entries6 and 7 above Name and signature of the applicant Materials, excluding fabrics and leather, for manufacturing of— (@) leather goods and leather garments and sportsgoods;, (b) garments and textile made-ups including foundation garments;and (c) furniture, woodware, andfittings. Textiledesigns,artwork,transparencies(bearingdesignfortextiles) forthe reproduction of finishedgoods. Plush fabrics, nylon, polyester fiber, eyes, and nose for use in stuffedtoys. Unit soles with heels, soles, and heels for the manufacture offootwear. Price labels or tags for affixing on finishedgoods. Trimmings, buttons, belts, fur lining, lining, pads, and interlining material, Velero tapes, hangers, special labels, special buttons, rivets, eyelets, buckles, special brand tags, special thread, and otheritemssuchasdecorativefittings.zippers,lockerloops,HB3device (earphone and accessories), etc. for use in readymade garments, foundation garments, textile made-ups, footwear, and other items mentioned in this table. Materials for embellishing or decorating goods produced in Pakistan forexportation. Components and sub-components for assembly of- (a) machinery and partsthereof; (b) electrical and electronic equipment and partsthereof;10. 13. 4, (©) _ bicycles; (@) _aluminum-ware, stee! ware, kitchen utensils, and cutlery, vacuumflasks; {@) surgical instruments; and (0 dolls, toys, andgames. Forgings of surgical instruments forproce Packing material (excluding straw, paper, paper cones, glass wool, and like material) for packing ofgoods. Polypropylene woven and jute bags subject to the condition that such bags bear the particulars of the Pakistani exporters in permanent print on eachbag. Materials for general superficial processes such as elementary repairs, cleaning, removal of damaged parts, sorting, straining, sifting, clarification, filtering, marking, sealing, labeling, re-packing, drying, preserving, refrigerating, chilling, fumigating, greasing, anti-rusting, protective coating, printing.etc. Materials, for the manufacture of decorative items, through the process of cutting, knotting, or any other process, to be used in gift packs, toys, and sweetsichocolate boxes, etc., for decoration purposes. Materials, subcomponents, and components for the manufacture of stationery items like pencils, glue sticks, fiber tip pens, and staples, etc.