FBR revises Customs Rules to streamline scrap imports, EFS

August 06, 2025 (MLN): The Federal Board of Revenue (FBR) has issued amendments to the Customs Rules, 2001, through S.R.O. 1435(I)/2025, revising procedures for scrap imports and updating key provisions of the Export Facilitation Scheme (EFS).
The changes aim to streamline compliance and support industrial efficiency.

Revised Scrap Import Regulations

• Imports of motor and compressor scrap will now be assessed based on copper content—10% by weight for motor scrap and 8% for compressor scrap. The remaining steel scrap will be subject to duties and taxes and may only be sold to registered melters.

• Exemptions previously available for iron and steel scrap have been withdrawn.

Textile Inputs Removed from EFS

• Raw cotton, cotton yarn, and grey cloth are no longer covered under the EFS. However, shipments with bills of lading dated within ten days of the notification will remain eligible.

Insurance Guarantees Introduced

• A new provision allows the use of "insurance guarantees" in place of bank guarantees, provided they are issued by AA++ rated insurance companies and follow formats prescribed by the Board.

• Until the format is officially released, EFS users must continue submitting bank guarantees.

Greater Flexibility for Raw Material Procurement

• EFS users may now acquire up to 10% of new raw materials without prior approval from regulatory authorities, easing procurement for exporters.

Extended Input Utilization Periods

• The utilization period for authorized inputs under EFS has been extended from 60 to 90 days.

• In exceptional cases, a committee comprising officials from FBR, the Ministry of Commerce, and the Ministry of Industries may grant an additional nine-month extension.

These changes reflect a shift toward more flexible and industry-friendly customs procedures. Stakeholders are encouraged to study the revised rules to ensure compliance and take full advantage of the updated framework.

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