ISLAMABAD: The Federal Board of Revenue (FBR) has unveiled a new indemnity bond for exporters, allowing them to sell or transfer plant machinery, equipment, and apparatus from one Export Facilitation Scheme (EFS) user to another.
This initiative aims to streamline the process and provide a framework for such transactions within the Customs Rules, 2001.
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The draft of the proposed “indemnity bond” has been released by the FBR, outlining the necessary amendments required for implementation. As per the new rules, exporters operating under the EFS can apply to the Regulatory Authority for permission to sell or transfer their plant machinery, equipment, and apparatus to another EFS user.
In cases where the units involved fall under the jurisdiction of different Collectorates, the sale or transfer will be permitted upon obtaining a no objection certificate from the destination Collectorate. It is important to note that any sale or transfer will be subject to a security and indemnity bond for the remaining period, as prescribed in Appendix-VI, which was deposited at the time of import.
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Upon completion of the sale or transfer, the EFS user must provide a certificate to the respective Collectorate, confirming that the transaction was carried out in accordance with the prescribed procedure. This procedure will also be applicable in the case of a merger or acquisition involving EFS users.
According to the draft indemnity bond, the Regulatory Authority permits the removal of plant machinery, equipment, and apparatus from one EFS user to another. However, the bond emphasizes that the EFS user shall be liable to pay all outstanding duties, taxes, drawbacks, repayments, rebates, and refunds upon demand. This includes any amounts not levied or paid under the rules for the procurement of unaccounted plant and machinery. Additionally, penalties imposed by the Regulatory Authority or adjudicating officer for violations of the rules or acts must also be settled.
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The indemnity bond specifies that if the licensee fails to adhere to any conditions laid down in the rules, the aforementioned amount may be recovered as arrears under relevant sections of the Acts and the corresponding rules.
The introduction of this new indemnity bond by the FBR aims to promote transparency and facilitate smooth transactions for exporters involved in the sale or transfer of plant machinery, equipment, and apparatus. These amendments will provide a clear framework and guidelines, ensuring compliance with regulations and reducing potential obstacles in the process.
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