Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has noted concerns raised by the Pakistan Chemicals & Dyes Merchants Association (PCDMA) about the possible misuse and diversion of dyes and chemicals imported under the Export Facilitation Scheme (EFS) into the local market. Following the FBR chairman’s directions, Customs Export held a consultative meeting with the PCDMA at Customs House Karachi to discuss an effective monitoring mechanism to ensure dyes and chemicals imported under the EFS are used for their intended purpose.
The meeting was attended by Collector Customs Exports Afnan Khan, Deputy Collector EFS Waqar Ahmed, PCDMA Chairman Saleem Mukati, Senior Vice Chairman Shahid Bashir, former chairmen Salim Valimuhammad and Abdul Rasheed Khatri, and other Customs officials. During the meeting, officials from the Collectorate of Customs Exports and the PCDMA delegation agreed on the need to prevent possible misuse of the EFS and develop an effective monitoring mechanism. The two sides also discussed cooperation to strengthen the scheme’s contribution to promoting the country’s exports.
The PCDMA delegation briefed Customs officials on its concerns about possible misuse of EFS imports, particularly textile dyes and chemicals, including reactive dyes imported under PCT 3204.1600, as well as those under chaptersas well as those under chapters 28 and 29. The association pointed out that imports under the EFS have been increasing. Still, the corresponding impact on export growth has not been evident, raising concerns over possible misuse of the scheme.
The PCDMA delegation urged the Collector, Customs Exports, to ensure that designated industries use dyes and chemicals imported under the EFS rather than diverting them for sale in local markets.
It also called for a review of the quantities of raw materials being imported in the names of industries under the EFS and their actual consumption levels. The association stressed the need to determine whether the imported raw materials were being fully utilized in the industries for which they were imported or diverted to the domestic market.
The meeting also included an exchange of import data. The PCDMA emphasised that imports under the EFS should be based on a consumption formula and linked to exports. The association said such measures could help prevent possible misuse and ensure that duty and tax concessions provided under the EFS are used for the intended purpose. The participants also stressed the need to improve administrative procedures and introduce a transparent audit mechanism to effectively monitor the use of raw materials imported under the EFS.