Export-oriented companies will now only get refunds of customs and regulatory duties from the Directorate of Customs Concessions and Refunds.
VAT money will be paid back from the respective VAT commissionerates, according to a circular of National Board of Revenue (NBR).
All bonded and non-bonded companies have to apply for refund of duty-VAT within six months after export, it said.
Recently, the NBR has issued the Duty Refund Rules 2021. From now on, tax will be refunded under these rules. The NBR reimburses the export-oriented companies for the various products, including raw materials and intermediates.
"The respective exporters will have to apply for a refund at the Customs Rebate and Refund Directorate," it said.
Export-oriented companies are divided into two groups in terms of duty-tax refunds. One of them is a bonded institution. They do not have to pay duty on import of raw materials. Even if the goods are collected locally, the VAT money can be refunded.
On the other hand, non-bonded local companies will get back duty-VAT on the portion of their production they export.
In July 2019, the new VAT Act gave the responsibility to the commissionerate concerned to refund VAT.
As a result, the export-oriented companies are in some trouble. VAT Commissionerates are also facing various complications in refunding VAT money. The matter was further clarified in the rules.
Exporters have to apply in a specific form with proof within six months of exporting the goods to get the import duty refunded. After submission of the application form and documents of the applicant, the Commissioner will take necessary steps to verify and select it.
If necessary, on-the-spot inspection will also be done. Within 21 working days of inspection or within 15 working days if inspection is not required, the commissioner will issue the refund as a check in favour of the applicant's account.
In this regard, an official of the Directorate of Customs Concessions and Refunds said that now that the rules have been issued, it has been clarified how the work will be done in any way.
Seeking anonymity, a BKMEA leader said, bonded companies do not have to pay duty at the import stage of raw materials. But the factory has to pay VAT at different stages including gas and electricity. Although they are supposed to get the money back, many do not apply for it due to fear of complicated process and harassment.
