Customs officials and PCDMA agree to strengthen monitoring of duty-free chemical imports and link raw material consumption with export performance.
The Federal Board of Revenue (FBR) has taken notice of concerns over the possible diversion of dyes and chemicals imported under the Export Facilitation Scheme (EFS) to Pakistan’s domestic market, following representations from the Pakistan Chemicals & Dyes Merchants Association (PCDMA).
Acting on the directions of FBR Chairman Rashid Mahmood Langrial, Customs Export held a consultative meeting with PCDMA representatives at Customs House Karachi to discuss measures to ensure that imported raw materials are used for their intended export-related purposes.
The meeting agreed on the need for stronger monitoring and a more effective mechanism to prevent potential misuse of the scheme.
PCDMA Flags Chemical Import Concerns
The PCDMA delegation raised concerns over imports of textile dyes and chemicals, including reactive dyes classified under PCT 3204.1600, as well as chemicals falling under Chapters 28 and 29.
The association said imports under the EFS had been increasing, but the corresponding impact on export growth had not been evident, prompting questions about whether the scheme’s concessions were being used as intended.
The delegation urged Customs authorities to ensure that dyes and chemicals imported under the scheme reached their designated industries rather than being diverted for sale in local markets.
It also called for a review of the quantities of raw materials imported by individual industries against their actual consumption levels to identify potential discrepancies.
Imports to Be Linked With Exports
During the meeting, the two sides discussed exchanging import data and introducing a system under which permissions for EFS imports would be based on a defined consumption formula.
The PCDMA stressed that imports under the scheme should be directly linked with export performance, helping authorities determine whether imported materials were being consumed in the production of goods intended for export.
Such measures could help protect the purpose of the EFS and ensure that the duty and tax concessions offered under the scheme benefit eligible export-oriented industries.
Customs, Industry Seek Transparent Monitoring
Participants also emphasised the need to improve administrative procedures and establish a transparent audit mechanism to monitor the use of raw materials imported under the scheme.
The meeting was attended by Collector Customs Exports Afnan Khan, Deputy Collector EFS Waqar Ahmed, PCDMA Chairman Saleem Mukati, Senior Vice Chairman Shahid Bashir and former chairmen Salim Valimuhammad and Abdul Rasheed Khatri, along with other Customs officials.
The discussions reflected a shared interest in strengthening oversight while preserving the EFS’s role in supporting Pakistan’s exports. No final implementation timeline for the proposed monitoring measures was specified in the information provided.