Short Title Application And Commitment Definitions Processing And Sanctioning Of Duty Drawback Claims Time Frame For Payment Of Duty Drawback Review Of Category Monthly Reporting

GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE ***** Islamabad, the August 12, 1998 NOTIFICATION (CUSTOMS/CENTRAL EXCISE) S.R.O. 905 (1)/98.- In exercise of the powers conferred by section 219 of the Customs Act, 1969 (IV of 1969), section 37 of the Central Excise Act, 1944 (I of 1944) and in supersession of all earlier instructions issued in this regard, the Central Board of Revenue is pleased to make the following Rules:- 1. Short title, application and commitment. - (1) These rules shall be called Duty Drawback (Claim Payment) Rules, 1998. (2) These rules shall apply in respect of duty drawback claims filed by the exporters pertaining to their exports to any country including Export Processing Zones in Pakistan, except land route to Afghanistan and to Central Asian Republics through Afghanistan. (3) They shall come into force with immediate effect. 2. Definitions. - In these rules, unless there is anything repugnant in the subject or context- (a) “Act” means the Customs act, 1969 (IV of 1969), and Central Excise act, 1944 (I of 1944); (b) “Complete claim documents” means required documents for processing and sanctioning of duty drawback claims, namely:- (i) Application for export duty drawback declaring their category; (ii) Calculation sheet. (iii) Bank Credit Advice - In case of non-submission of bank credit advice, a bank guarantee equivalent to the duty- drawback shall be submitted in lieu thereof. In absence of either the bank credit advice or bank guarantee, attested copy of L C shall be submitted in case of exports made against letter of credit; (iv) Airways bill, Bill of Lading, Postal receipt or Cross Border Certificate; (v) Customs certified invoice; (vi) Packing list (if any); (vii) Photostat copy of Exchange Bulletin, or its authenticated copy, showing rate or rates prevailing on the day prior to the registration of the shipping bill; (viii) Quadruplicate copy of bill of export shipping bill containing customs examination report and bearing complete postal address of exporter and National Tax Number; (ix) For payment through banks. Pre-received duty drawback proforma and under taking, as per format Annex-A or Annex- B as laid down in State Bank’s circular No. 76; and

(x) For payments to be made through customs treasury. Proformas of rebate payment orders shall be submitted. (c) “Duty drawback” means a claim of refund of import duty, excise duty, as envisaged in clause ( c ) of section 21, sections 37, 39, 40 and 41 of the Customs Act, 1969, and Rule 12 and 12A of the Central Excise Rule, 1944. (d) “Exporter” includes a person who exports goods to any country including Export Processing Zones in Pakistan and files duty drawback claims, except for export to Afghanistan and through Afghanistan to Central Asian Republics. (e) “Exported goods” means exported items to any foreign country including Export Processing Zones in Pakistan except to Afghanistan via land route and through Afghanistan to Central Asian Republics. (f) The words and expressions used and not defined herein shall have the meanings assigned to them in the Acts. 3. Processing and sanctioning of duty drawback claims. - (1) Claims of duty drawback shall be sanctioned by the Customs if the same are complete in all respect, on the basis of profiling of exporter as given below: I. Category “GOLD” Following category of exporters shall be rated as category “gold”: ( I ) FOR LIMITED COMPANIES: ( a ) Common Criteria: (1) Limited Companies having certified Books of Accounts for the last 18 months; (2) either certified accounts showing amount of export or a separate statement by the concerned Chartered Accountant firm regarding amounts of export sales for the period in clause ( 1 ) above: (3) bank certificate for the last three years regarding export performance; and (4) payment of duty drawback through Bank or by crossed cheque encashable in any of the bank branches issuing the certificate at clause (3) above. (b) Specific Exporter Profile: Scrutiny of the past one year’s duty drawback claim payments indicating ninety per cent claim acceptance in terms of value. II. Category “SILVER” Following category of exporters shall be rated as category “Silver”:- (a) Common criteria (1) New Enterprises - Exporters having registration with Export Promotion Bureau of less than 3 years but with at lease one

year’s valid registration; (2) Bank certificate for export performance since the date of export registration; (3) Verification by the Collectorate (through Fax, E.mail, post courier or person) of bank certificate mentioned at clause (2) above, within the period of fifteen days. Collector shall ensure that verification from the bank is completed within fifteen days; (4) Bank certificate for loan limit indicating credit limit being not less than four times the amount of claim (certificate to be verified, by the Collectorate, from the respective bank branch within the said limitation period of fifteen days). Collector shall ensure that bank confirmation is obtained within the said time frame of fifteen days; and (5) Payment of duty drawback through bank or by crossed cheque encashable in any of the branches issuing the certificate at clause (2) or (4) above. (b) Specific Exporter Profile.- Scrutiny of past one year’s duty drawback claim payments or the claims actually filed during the year indicating ninety per cent claim acceptance level by value. III Category “OTHERS”.- Following class of exporters shall be rated as category “OTHERS”: (I) Persons not falling under categories “GOLD” and “SILVER”; (II) Persons disqualified in category “GOLD” or category “SILVER” shall be downgraded to category “OTHERS”, directly if claims acceptance levels under audit are less than ninety per cent or forged documents are submitted. Once an exporter is down-graded, he cannot be up- graded for at least eighteen months and will only be considered by the Collector, if he is satisfied that during this period, the exporter has met the requirements of respective category for continuous period of eight months; (3) persons involved in a prosecution case under the Customs Act, 1969 (IV of 1969), or Central Excise laws or any other tax law shall be rated in category “OTHERS” even if they fulfill rating criteria for “GOLD” OR “SILVER”; and (4) if the Directorate General of Inspection and Internal Audit establishes claim payment below ninety per cent level in post- payment audit, the exporter shall be classified in category “Others”. 4. Time frame for payment of duty drawback.- ( 1 ) All exporters falling under category “GOLD” shall be allowed duty drawback within seventy two hours from the date of receipt of requisite complete claim documents. (2) Exporters falling under category “SILVER” shall be allowed duty drawback within fifteen days from the date of receipt of requisite complete claim documents. (3) The refund claims of exporters falling under category “OTHERS” shall be sanctioned only after thorough scrutiny and verification. 5. Review of category.- (1) If a person in a lower category improves whether on the basis of audit or on the basis of aging, or on the basis of other prescribed criteria, his category-rating shall be upgraded accordingly after a review by the Collector on the

basis of recommendation of a Committee comprising of rerpresentative of Export Promotion Bureau, Collectorate in which the exporter is registered, chamber of jurisdiction of exporter’s business and a representative of the relevant Export Association of which the exporter is a member: Provided that the review of category of an exporter for the purposes of up- gradation shall be down only once in six months subject to completion of the period of eighteen months in a particular category. (2) The Review Committee shall meet every month to review the category:- (a) on a reference from any organization for downgrading of rating or category of any exporter; and (b) on a reference from any exporter for up-gradation of his rated category. 6. Monthly reporting-. The disposal of duty drawback claims shall be reported by the Collector monthly to the Chief (Survey and Rebate) and Directorate General of Research and Statistics of the Central Board of Revenue, giving the details of disposal for each category and pendency, if any, along with reasons thereof, by the 5th of each month for each preceding month. [C.No. 3(125)/Rebate/98] (Muhammad Nadir Khan Hoti) Chief (Survey