The Federal Board of Revenue (FBR) has announced substantial revisions to the Export Finance Scheme (EFS) to prevent its misuse. On Friday, the FBR issued SRO301(I)/2025 to amend the Customs Rules, 2001, effectively withdrawing the Export Facilitation Scheme (EFS) 2021 for importers of iron and steel scrap.

Key changes include updated security requirements for availing the facility. Manufacturers-cum-exporters with a minimum export value of $20 million or more over the last two years must provide an indemnity bond and post-dated cheques (PDC). Those with export values less than $20 million must furnish an indemnity bond and PDC equivalent to the average annual duty and taxes of input goods used in exports over the past two years, along with a bank guarantee or revolving bank guarantee for any excess duty and taxes deferred or remitted.

Users with poor compliance records, including pending recoveries, contraventions, or criminal proceedings, will face immediate suspension of authorization, pending a defense. Non-compliance in reconciliation statements or stock audits may also result in suspension.

The revised EFS procedure aims to reduce the input utilization period, establish input authorization based on production capacity/input-output ratio, replace insurance guarantees with bank guarantees, implement vendor facilitation controls, ensure the utilization of imported input in exported goods, and withdraw the EFS facility from importers of iron and steel scrap.

Under these rules, input goods must be utilized within nine months, with an extension possible under exceptional circumstances, as determined by a committee constituted by the board.

For supplies against international tenders or exempt projects or sectors in Pakistan, users must file a declaration in the WeBOC system, according to the FBR.