Rebate of Central Excise Duty

Export Quality Control

Exports (Quality Control) Order 1973 (App: 14.1) provides the following safeguards to ensure quality of export goods:-

• Export goods have to conform to the standard or grade designation applicable to the product in question or the agreed sample.
• Supply of goods within agreed delivery schedule.
• Supply of goods according to agreed delivery contract
• Payment of agreed commission or for services rendered.
• Proper packing of goods to protect them from damage.
  

Export Duties

Exports of the following products are subject to Regulatory Duties, as indicated against each, in terms of SRO-(I)/2000 dt 1st July 2000 (App: 14.2):-

• Raw hides and skins,wet blue, tanned hides and skins 20%
• Uncrushed bones, steamed bones, bone meal, bone grist and shells 5%
• Crushed bones.10%
  

Opening of Branch Office Abroad

Merchanting Trade

Foreign Exchange Circular No 71 dt 25th August 1992 (App:14.4) gives general permission to three-way merchanting trade through back-to-back letters of credit providing for payment in convertible currency  or advance payments, in respect of crude oil, edible oil, wheat, rubber, cotton, tea, sugar and fertilizer. The conditions are:-

• The price differential is not less than 1% plus bank charges.
• Letters of credit to be opened by Pakistani intermediary in favour of third country supplier carries sufficient usance so that payments become due only after receipt of payment from the importer.
• No export credit will be available.
• Goods are shipped directly from the source country to the final destination country.
• No forward cover facility will be available.
  

Commodity Exchange Arrangement

Foreign Exchange Circular No. 50 dt 3rd November 1998 (App: 14.5) allows private parties to enter into Commodity Exchange Arrangements with foreign parties. Ministry of Commerce prescribes a Negative List of commodities to which this scheme is not applicable. The current Negative List, notified by the Ministry of Commerce as  SRO    (I)/98 dt  January 1999, excludes from the scheme the following items:-

• Items banned for exports, (those restricted, subject to prescribed conditions).
•  All textile products exported against textile quotas.
• Items banned or restricted for import, except those imported for export production under any of the temporary importation schemes.
  

The salient features of the scheme are:

• Applications for Private Commodity Arrangement are submitted to the Foreign Exchange Department of the State Bank of Pakistan through banks authorized to deal in foreign exchange, with copies of Export/Import Registration certificates and past performance during preceding three financial years.
• The party nominates its bank to maintain a performa account for the trade transactions.
• No forward exchange cover facility is available.
• This scheme is not eligible under the Export Finance Scheme.
• Exports are subject to normal export duties.
  

Export Houses

The Registration of Export Houses Order 1981, notified by the Ministry of Commerce as SRO 1019(I)/81 dt 14 September 1981 (App: 14.7) provides for registration of “Export Houses”. The salient futures of the scheme are:-
“Export House” is defined as a trading company registered as an export house under the aforementioned registration order. An applicant for registration as an Export House has to be a trading company registered under the Companies Ordinance 1984. It should have, or undertake to establish within a specified period, an office abroad. It should have an export performance of not less than Rs. 2 million during the year immediately preceding the year of application.
Any two or more exporters, with a combined export performance ofRs. 2 million, can form a consortium and get themselves registered as a trading company under the Companies Ordinance and as an exporter with the Export Promotion Bureau (see para 3.1 in Chapter 3).
Export performance includes, besides direct merchandise exports, net earnings from erection charges, consultancy fees, and collaboration fees, royalties for books, net earnings from re-export or off-shore trading.
The competent authority to register Export Houses is a committee headed by the Vice Chairman, Export Promotion Bureau and comprising Joint Secretary (External Finance) in the Ministry of Finance and Director of Foreign Exchange in the State Bank of Pakistan. (The same committee considers applications for opening branch offices abroad- see para 14.4 above).
The fee for registration as Export House is Rs. 10,000/-. Registration as an Export House is valid for one year and is renewed from year to year, without any renewal fee, subject to continued satisfactory export performance. An Export House is entitled to the following facilities:

• Import against BMR for the company itself and also on behalf of individual importers or a group importers.
• Parity with recognised industrial units for purposes of BMR imports.
• 1% of incremental export earnings from export of cotton textiles and cotton yarn and 2 to 5% of exports of other products, for office expenses abroad, collection of commercial intelligence, market studies, development of new products and product adaptation.