November 21, 2013
The Economic Co-ordination Committee (ECC) of the Cabinet will Thursday decide fixation of quantity and consumption time of inputs, including palm oil used in the production of ghee to be exported to Afghanistan under the Duty and Tax Remission for Export (DTRE) scheme.
Sources told us on Wednesday that the Federal Board of Revenue and ghee/cooking oil industry are divided over the issue of consumption time period for utilising the imported palm oil in the finished product to be exported to Afghanistan under DTRE scheme.
According to the DTRE rules, the facility shall be allowed to the manufacturers-com-exporters of ghee only and in respect of those units which are located in Khyber Pakhtunkhawa and Balochistan. The DTRE facility shall be allowed to the manufacturers-cum-exporters to acquire raw materials for the manufacture and export of vegetable ghee not exceeding 1000 Metric Tons.
Moreover, the time limit shall be 90 days for utilising the imported palm oil and this period shall be counted from the date of Import General Manifest (IGF) to export date of the consignment and exports of ghee shall be allowed in foreign currency only. Sources said that the customs law is very clear on the issue of consumption of imported raw materials in finished products to be exported under the DTRE. The DTRE facility is admissible to the manufacturers-cum-exporters to acquire raw materials for the manufacture and export of vegetable ghee not exceeding 1000 Metric Tons. However, the time period for utilising this 1000 MT of imported palm oil is 90 days as per DTRE Rules. Even if the manufacturer-cum-exporter utilise this 1000 MT of imported palm oil before 90 days period, the second utilisation of another 1000 MT can only be done after expiry of 90 days laid down period by obtaining DTRE approval.
Some ghee and cooking oil manufactures are making an attempt to utilise over and above 1000 MT of imported palm oil within 90 days under DTRE scheme. They think that the second DTRE approval can be obtained before 90 days if they have consumed and exported 1000 MT within the said period. Exporters claimed that they are entitled to second DTRE approval in case they consume 1000 MT imported raw material to be used in export goods before 90 days. Through second DTRE approval, they would try to consume duties and taxes free imported palm oil of 1000 MT within 90 days.
However, the field formations of the FBR are of the view that till expiry of 90 days period, the second DTRE approval cannot be given to the manufacturers-cum-exporters for utilisation of another 1000 MT of the imported raw material. The manufacturer-cum-exporter cannot utilise over 1000 MT of imported palm oil within specified 90 days period by obtaining second DTRE approval by the concerned Collectorate. In order to remove confusion, the FBR has taken up the matter with the ECC to guide the tax authorities on the issue. It would be seen whether legal interpretation of the FBR is correct on DTRE issue or exporters” viewpoint be accepted.
Courtesy Business Recorder