FBR Moves to Curb Possible Misuse of EFS Chemical Imports
FBR and PCDMA discuss stronger monitoring of dyes and chemicals imported under the Export Facilitation Scheme.
The Federal Board of Revenue (FBR) has taken notice of concerns over the possible misuse of dyes and chemicals imported under Pakistan’s Export Facilitation Scheme (EFS). The concerns relate to the potential diversion of imported materials into local markets.
FBR Chairman Rashid Mahmood Langrial directed Customs Export to discuss the issue with the Pakistan Chemicals & Dyes Merchants Association (PCDMA). The two sides held a consultative meeting at Customs House Karachi to develop an effective monitoring mechanism.
Collector Customs Exports Afnan Khan and Deputy Collector EFS Waqar Ahmed attended the meeting. The PCDMA delegation included Chairman Saleem Mukati, Senior Vice Chairman Shahid Bashir, and former chairmen Salim Valimuhammad and Abdul Rasheed Khatri. Other Customs officials also participated.
Customs and PCDMA Seek Stronger Monitoring
During the meeting, Customs officials and PCDMA representatives agreed on the need to prevent possible misuse of the scheme. They also discussed closer cooperation to ensure that EFS imports support Pakistan’s export growth.
The PCDMA delegation outlined concerns about imported textile dyes and chemicals. It specifically highlighted reactive dyes classified under PCT 3204.1600, as well as chemicals covered by Chapters 28 and 29.
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The association noted that EFS imports have increased. However, it said the corresponding growth in exports has not been evident. This gap, according to the PCDMA, raises questions about whether importers use the scheme strictly for its intended purpose.
PCDMA Calls for Consumption-Based Import Limits
The association urged Customs authorities to ensure that industries use imported dyes and chemicals for their designated purposes. It also called for measures to prevent the possible diversion of these materials to domestic markets.
The PCDMA proposed reviewing the quantities of raw materials imported under the scheme against the actual consumption levels of the industries concerned.
Such a review could help authorities determine whether businesses use imported materials in production or divert them for local sale.
The delegation also stressed that officials should approve EFS imports according to a defined consumption formula. It called for a direct link between import quantities and export performance.
Audit Mechanism Proposed to Protect Tax Concessions
The meeting included an exchange of import-related data. Participants discussed ways to improve administrative procedures and introduce a transparent audit mechanism.
The PCDMA said stronger oversight could help ensure that businesses use duty and tax concessions for their intended purpose. It also argued that linking imports with exports would help prevent potential misuse of the scheme.
The proposed measures aim to improve accountability while supporting industries that legitimately use imported raw materials to manufacture export goods.
The discussions mark a step towards closer coordination between Customs authorities and the chemical and dyes trade. Any new monitoring rules or changes to the EFS will depend on the relevant authorities’ decisions.
