FE Circular Letter No.2 of 2003

F.E. Circular Letter No. 2
January 22, 2003

The Head/Principal Offices of All
Authorized Dealers in Foreign Exchange.

Dear Sirs,

In terms of Government of Pakistan, Revenue Division’s Notification SRO 10(1)/2003 dated January 04, 2003 (Annexure-I), it has since been decided that effective from 6th January 2003 the Export Development Surcharge (EDS) would be collected by the Authorized Dealers on export of all goods, except where EDS is exempted, at the time of realization of export proceeds instead of the Customs Authorities at the time of shipment.

2. You are, therefore, advised to adopt the following procedure:-
(i) The date for switching over the collection of EDS from the Customs to the Authorized Dealers would be the 6th January, 2003. For shipments before the 6th January, 2003, the Customs would continue to collect the EDS and for shipments from 6th January, 2003 onwards the Authorized Dealers would collect the EDS on realization of export proceeds.

(ii) EDS will be collected, in full, by the Authorized Dealers at source from the rupee amount converted from the FCY on receipt of the full export proceeds. The applicable rate in terms of the above-mentioned Notification will be 0.25% of the FOB value realized at the applicable exchange rate prevailing on the date of realization of export proceeds.

(iii) In case of partials/short realization of export proceeds, the EDS would be collected by the Authorized Dealers at the applicable rate i.e. @ 0.25% of the full FOB value of the goods shipped converted into Pak. Rupees at the exchange rate prevailing on the date of first partial/short realized amount. Under such circumstances any further realization on account of the same shipment would not attract any EDS.

(iv) The EDS so collected by the Authorized Dealer will be deposited, alongwith duly filled in enclosed schedule placed at Annexure-II, by the Authorized Dealer either on consolidated basis after collection from the branches or directly by the branches, within 72 hours of deduction, for credit to Federal Government under sub-head-0213300-Export-Development Surcharge maintained with NBP, FTC Branch, Shahrae Faisal, Karachi.

(v) In case of non-realization of export proceeds on due date in terms of sale contract or within 180 days from the date of shipment, whichever is earlier, the banker will have to report the same to the Customs Authorities on the schedule attached at Annexure-III.

(vi) In case of subsequent realization of an overdue export proceeds on which EDS has not been collected earlier and has been reported under para (v) above, EDS would be collected as per the same procedure as laid down in para (ii), (iii) & (iv) above.

(vii) Authorized Dealers will be entitled to charge Rs.80/- (Eighty rupees) per transaction separately from the exporters in consideration of the services rendered by them.

(viii) Authorized Dealers would keep all relevant data/record for on-site inspection by the inspector from the Banking Inspection Department of the State Bank.

3. Authorized Dealers are advised to bring the same to the notice of all their constituents.

Yours faithfully,

(M. R. MEHKARI)
Director

Annexure - I
GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS AND REVENUE (REVENUE DIVISION)
Islamabad, the 4th January, 2003
NOTIFICATION
(CUSTOMS)

SRO 10 (1)/2003 – In exercise of the powers, conferred by section 21 A of the Customs Act, 1969 (IV of 1969), read with section 11 of the Finance Act, 1991 (XII of 1991), the Central Board of Revenue is pleased to direct that the Export Development Surcharge shall be levied, on exportation of all goods, except the goods exempted from the Export Development Surcharge as notified by the Federal Government from time to time, at the rate of 0.25% of the value of the said goods, as determined under section 25, or as the case may be, under section 25B of the Custom Act, 1969 (IV of 1969), and collected by State Bank of Pakistan or any other bank duly authorized by the State Bank of Pakistan, upon the realization of the export proceeds in accordance with such rules and procedures as the State Bank of Pakistan may, by notification in official Gazette, specify.

[C. No.5(8)EP.2002.Vol-I]

Sd/-
(Mumtaz Haider Rizvi)
Additional Secretary/Member

Annexure - II
SCHEDULE TO BE SUBMITTED BY THE BANKS AT THE TIME OF DEPOSITING THE EDS IN NATIONAL BANK OF PAKISTAN COLLECTION ACCOUNT

Name and Address of the Bank/Branches depositing EDS:________________________________ Dated_________________
The details of EDS Collections made at our bank/branch offices are shown below:

			FOB value of the goods shipped (in FCY)		Amount Realized in FCY whether full or partial/short realization.
S. No.	Name of the Exporter	No. & Date of B/L or Airway Bill	Currency	Amount	Currency	Amount	Date of realization of export proceed (whether full or first partial)	Rate of conversion applicable on the date of first realization i.e at Column 6	Amount Realized in Pak .Rupees (5 x7). (Rs.)	Pak Rupees equivalent of FOB Value of goods shipped at the Exchange Rate at column ‘7’ (4 x7). (Rs.)	EDS collected @ 0.25% of column -9 0.25 x column -9 100 (Rs.)
1	2	3	4		5		6	7	8	9	10

Total amount of Rs.___________ has been collected as above and enclosed payment order/draft dated ___________ drawn on ______________ for the credit to Federal Government under sub-head - 0213300 – Export Development Surcharge account maintained with NBP, FTC Branch, Shahrae Faisal, Karachi in terms of Revenue Division’s Notification No. 10/(1) 2003 dated the 4th January 2003

Authorized Signature
(Bank /Branch Name with Stamp

Annexure - III

Bank’s letter head

SCHEDULE TO BE SUBMITTED BY THE BANK TO THE CUSTOMS AUTHORITIES IN RESPECT OF NON-COLLECTION OF EDS DUE TO NON-REALIZATION OF EXPORT PROCEEDS

To,

The Collector of Customs, __________________________________________

We advise that the Export Proceeds amounting to. …(amount in FCY)…….. being the FOB value of the goods shipped of the exporter M/s. (Name of the exporters)___________ against the Export Bill No.----------- dated ----------------Bill of Lading/Airway Bill No. (B/L or Airway Bill Number)__________ dated _(Date)_______ , have not been realized on the due date in terms of the sale contract or within 180 days from the date of shipment, whichever is earlier.

(Signature & Seal)
(Bank)