Enhanced scrutiny and laboratory testing target alleged misuse of tax and customs exemptions under the Export Facilitation Scheme
KARACHI: Pakistan Customs has stepped up enforcement against the alleged misuse of exemptions under the Export Facilitation Scheme (EFS) through misdeclaration of imported fabric, an initiative welcomed by the All Pakistan Textile Mills Association (APTMA).
In a press release, APTMA appreciated the action taken by the Federal Board of Revenue (FBR) and Pakistan Customs to address concerns surrounding the import of greige fabric under the EFS.
The association said greige fabric had been excluded from the scheme under SRO 1435(I)/2025, but raised concerns that some consignments were allegedly being imported under incorrect descriptions to obtain exemptions from customs duty and sales tax.
Customs intensifies scrutiny of fabric consignments
Pakistan Customs field formations are subjecting relevant consignments to enhanced scrutiny to establish the correct description and nature of imported fabric.
Where necessary, physical examination of consignments is being supplemented by laboratory testing of samples to determine the actual composition and description of the goods.
The process is aimed at identifying potential violations of applicable laws and procedures and preventing traders from obtaining concessions to which they are not entitled.
APTMA backs enforcement action
APTMA said misdeclaration of imported fabric could lead to a loss of legitimate government revenue while creating an unfair competitive disadvantage for domestic manufacturers that comply with the law.
The association also acknowledged the role of Customs field formations in examining consignments and taking action where misuse of the EFS is identified.
APTMA called for continued vigilance to ensure that the Export Facilitation Scheme is used strictly for its intended purpose and does not become a channel for obtaining unauthorised tax and customs concessions.
Customs vows to protect compliant businesses
Pakistan Customs said trade facilitation and effective enforcement are complementary priorities, stressing that facilitation measures are intended to support legitimate and compliant trade.
The department said misuse of exemptions, concessions or regulatory procedures undermines the integrity of the trade system and must be addressed in accordance with the law.
Pakistan Customs said it would continue strengthening controls against misdeclaration and other forms of abuse while safeguarding government revenue and protecting businesses that comply with regulations.
The department further reaffirmed its commitment to ensuring that trade facilitation schemes operate transparently and in line with their intended objectives.
The latest enforcement measures highlight the authorities’ focus on preventing abuse of the EFS while maintaining facilities for legitimate exporters and manufacturers.