FBR reviews possible misuse of dyes imported under export scheme.
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✧ GENERATE BRIEFING
The Federal Board of Revenue (FBR), led by Chairman Rashid Mahmood Langrial, has initiated strict regulatory oversight to address concerns raised by the Pakistan Chemicals and Dyes Merchants Association (PCDMA) regarding the potential domestic market diversion of duty-free dyes and chemicals imported under the Export Facilitation Scheme (EFS). Following directives from the FBR, senior Customs Export officials—including Collector Customs Exports Afnan Khan and Deputy Collector EFS Waqar Ahmed—convened a consultative session with PCDMA Chairman Saleem Mukati and Senior Vice Chairman Shahid Bashir at Customs House Karachi. The PCDMA raised alarm over a notable surge in imports of textile dyes (specifically reactive dyes under PCT code 3204.1600) and chemicals under Chapters 28 and 29 without a matching surge in national export volumes. The association urged Customs to verify individual industrial consumption quotas against actual export outputs, implement consumption-based formulas for import authorizations, and establish transparent audit mechanisms to prevent illicit domestic sales that undermine local legitimate traders.
Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial has taken notice of concerns raised by the Pakistan Chemicals and Dyes Merchants Association (PCDMA) over the possible diversion of dyes and chemicals imported under the Export Facilitation Scheme (EFS) into Pakistan’s domestic market.
Following the chairman’s directions, Customs Export officials held a consultative meeting with PCDMA representatives at Customs House Karachi to develop a monitoring mechanism ensuring that imported materials are used for their intended export-related purposes.
The meeting was attended by Collector Customs Exports Afnan Khan, Deputy Collector EFS Waqar Ahmed, PCDMA Chairman Saleem Mukati, Senior Vice Chairman Shahid Bashir and other customs officials and industry representatives.
PCDMA raised concerns over textile dyes and chemicals, particularly reactive dyes classified under PCT code 3204.1600, as well as chemicals covered by Chapters 28 and 29 of the customs tariff. The association said imports under the scheme had increased without a corresponding visible improvement in export growth, raising concerns about potential diversion to local markets.
The association urged Customs to examine the quantities imported by individual industries against their actual consumption requirements. It said the review should establish whether the materials were being used in the production of export goods or sold in the domestic market instead.
PCDMA also called for import permissions under the EFS to be linked to consumption-based formulas and export volumes. Such a system, it argued, would help authorities determine appropriate import quantities according to industrial requirements and reduce the risk of misuse.
During the meeting, customs officials and the association exchanged import-related data and agreed on the need for stronger monitoring. Participants also discussed improving administrative procedures and introducing a transparent audit mechanism to track the use of imported raw materials.
The EFS provides eligible businesses with facilities to import inputs for export production under specified conditions. Concerns over possible diversion have raised questions about whether duty and tax concessions are reaching their intended beneficiaries and supporting export growth.
The proposed monitoring measures aim to protect government revenue, promote fair competition for legitimate local traders and ensure that the scheme supports export-oriented manufacturing. However, the concerns raised by PCDMA relate to possible misuse, and the reports do not establish that all businesses importing under the scheme have violated its rules.
