Duty Drawback to Be Paid to Exporters on FIFO Basis

Under the new policy on the processing and sanctioning of these statements, the Federal Revenue Board (FBR) must pay customs duty drawback to exporters on a first-in first-out basis (FIFO).

The FBR proposed changes in the 2001 Customs Rules via an SRO.561(I)/2020 released here on Monday to issue a new policy on the payment / processing of the exporters’ duty drawback claims.

As per the FBR, the FBR’s General Directorate of Post Clearance Audit (PCA) would conduct an exhaustive audit of the duty drawback payments. Any recovery identified by the PCA will be deducted from the exporter’s next duty drawback charge, in addition to recovery action against the exporters.

Taking into account the date of filing of claims, the customs duty drawback payments of these claims which are full in all respects shall be made on FIFO basis.

The FBR also provided customs official’s procedure for measuring the customs duty drawback claims made by the exporters. For the purposes of calculating the duty downside, account shall be taken of the average amount of customs duties charged on imported materials used in the manufacture of parts, intermediate or semi-finished items which are exported as such or further used in the manufacture of goods.

Directorate-General of Input Production Coefficient Organization (IOCO) should ideally review all the duty drawback levels after announcing the annual fiscal budget to reflect the effect of upward or downward adjustment of customs duties or the introduction of new duties. The exercise is due to be completed by 31 August and by 30 September the Board would ensure that notifications on revised rates are issued.

The duty downside as admissible is part of the export cargo assessment process, and the amount so admissible to the exporter is measured and assessed by the Customs Computerized System on sale, the amount of the proceeds repatriated to the country and Form-E settlement from the business bank.

When filing an export GD while entering a PCT code in the Customs Computerized System, the system shows the applicable SROs and DDB levels according to the definition of the products and the export value. The exporter can pick and claim the most appropriate admissible definition and duty drawback rate, added FBR.

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