Islamabad, March 9, 2025 – In a significant move to streamline trade policies and enhance regulatory compliance, the Federal Board of Revenue (FBR) has issued SRO 301(I)/2025, which introduces crucial amendments to the Export Facilitation Scheme (EFS). The new regulatory changes, effective immediately, aim to strengthen oversight, reduce misuse, and improve the efficiency of the scheme.
One of the major changes introduced by the FBR is the revocation of the EFS 2021 facility for importers of iron and steel scrap. Previously, businesses importing these materials were able to benefit from duty and tax deferrals under the scheme. However, with the new decision, these businesses will no longer be able to take advantage of these deferred payments, which is expected to impact a large segment of the industry that had been relying on these financial facilities.
Along with the revocation, the FBR has introduced more stringent security requirements for manufacturing-cum-exporters using the EFS facility. Specifically, businesses with an export value of $20 million or more over the past two years will now be required to submit an indemnity bond along with post-dated cheques (PDCs) as part of the new procedure. For manufacturers with export values below the $20 million threshold, they will need to submit an indemnity bond and PDCs equivalent to their average annual duty and taxes on input goods used in exports over the past two years. If these businesses use more input goods than what is covered by the PDCs, they will be required to provide additional security in the form of a bank guarantee or revolving bank guarantee.
The FBR’s new amendments also introduce stricter compliance measures to ensure that the EFS is being utilized properly. Businesses that have a poor compliance history—such as unresolved recoveries, contraventions, or criminal proceedings—will face immediate suspension of their authorization to use the facility. Non-compliance with reconciliation statements or failure to pass stock audits will also lead to suspensions, underscoring the FBR’s commitment to eliminating misuse of the EFS. These measures are designed to hold businesses accountable and ensure that the EFS is used for its intended purpose.
Further changes to the scheme include a reduction in the input utilization period. Under the revised rules, businesses will be required to use imported input goods within nine months. In exceptional cases, an extension can be granted by a committee formed by the FBR. This measure is part of the FBR’s broader efforts to monitor the usage of inputs and ensure that the goods are being used as intended for export production.
To enhance transparency, the FBR has mandated that businesses making supplies against international tenders or supplying to exempt projects and sectors within Pakistan submit a declaration via the WeBOC (Web-Based One Customs) system. This step ensures that all transactions are properly documented, reinforcing regulatory compliance.
In summary, these amendments to the Export Facilitation Scheme are designed to improve the efficiency of the program while addressing potential misuse. The FBR’s decision to tighten security, enforce compliance, and remove certain privileges like the iron and steel scrap facility reflects the government’s ongoing efforts to bolster fiscal discipline and encourage responsible business practices. These changes aim to foster a more transparent, accountable, and effective export ecosystem in Pakistan.