The automated duty drawback (DDB) system - conceived by the Ministry of Commerce and jointly implemented by Pakistan Customs and the State Bank of Pakistan (SBP) - has been made operational.
In an internal briefing held at the Ministry of Commerce under the chairmanship of Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood on Thursday, it was revealed that a total of 7,998 refund claims worth around Rs953 million had been processed through the system up to October 20, 2020.
“DDB is a risk-based automated system, operationalised on September 30, 2020, which aims to provide a hassle-free facilitative environment, without human interaction, for the export sector by direct transfer of duty drawback to the accounts of exporters,” the ministry said in a statement.
The step, along with the ongoing revision in duty drawback rates for various sectors, had been taken to address the longstanding issues faced by the exporters regarding refund claims, it said.
A fundamental principle of exports, under international agreements, is that there will be no duties, levies or surcharges on the export of goods. In the briefing, it was stressed that the principle was not followed in true letter and spirit in Pakistan as duty drawback in the past was calculated with an approach to earn more revenue rather than to facilitate exports.
The adviser was told that corrective measures were initiated last year and the Input Output Co-efficient Organisation (IOCO) did some quality work regarding DDB recalculation, which resulted in the revision of rates for several sectors. The exercise is still going on.
Other major issue was the delay in payments, “which has now been resolved with this automated system”, the meeting was told.
The PM aide appreciated the role of Pakistan Customs and the SBP in the implementation of the automated DDB system. “This will be a major facility for our exporters because it will enable them to make adjustments in their pricing structure to gain an edge over competitors,” said Dawood.
Published in The Express Tribune, October 23rd, 2020.
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