Commerce Ministry implements Trade Rationalization strategy

Ministry of Commerce implements the second component of the Trade Rationalization strategy that was approved by ECC on 6th October 2017, by issuing the SRO on PM’s Export Enhancement Initiative, improving upon the terms of the earlier scheme. The first of the three-pronged strategy was implemented by issuance of Regulatory Duties on imports of luxury and non-essential finished goods by FBR on Monday.

The main part of the trade strategy proposed by the Commerce Division was to improve the conditions of PM’s Export Enhancement Package which was modified in consultation with the exporters and the relevant Ministries. The earlier package provided for conditional duty drawback scheme which would only allow such facility to exporters who export 10% more than the previous year. This made the competitive marketing difficult for the exporters, as any performance less than that would make the facility inaccessible. The exporters were demanding a continuation of previous year’s package which gave duty drawback facility regardless of the increase in exports.

The new version of the package provides a hybrid scheme which provides 50% of the duty drawback to all the exports of the eligible sectors regardless of n 10% enhancement.

The SRO binds the State Bank of Pakistan (SBP) to clear the claims submitted by exporters’ Bank within 48 hours. The banks on their part will not take more than 15 days to verify and submit the claims to SBP and will credit exporter’s account within 24 hours of release of funds by SBP.

In order to encourage exporters to target new and far-flung destinations for exports, the package provides 2% additional Duty Drawback facility for exports to non-traditional destinations in Africa, South America, Oceana, CIS countries and Non-EU countries.

The third component i.e. Import Regulations will be covered by issuance of amended Import Policy Order by the Ministry of Commerce which is also expected to be issued this week.