CLARIFICATIONS REGARDING D T R E RULES

CLARIFICATIONS REGARDING D T R E RULES <!--[if gte mso 10]> CLARIFICATIONS REGARDING D T R E RULES By Mr. Akhtar Javed, Advocate, Lahore DTRE scheme entitles the exporters to procure imported and locally manufactured raw materials without payment of customs duty, central excise duty, sales tax and withholding tax for the manufacture of goods meant for export. The exporters operating under DTRE Scheme are facing various, difficulties. C.B.R. has made an attempt to remove the irritants through clarification issued vide its Letter C. No. 4(8)/TEPI/2001 dated 7-4-2003. The issues identified by C.B.R. and clarifications on these issues are given as follows: Issue 1: Can a DTRE manufacturers/exporters declare "approximate" description quantities and values of input goods (to be imported or purchased locally) under Rule 297(1) (i) of DIRE Rules, 2001 C.B.R.'s clarification: Yes. The DTRE manufacturers/exporters can "approximate" description, quantities and values of input goods. A variation up to 10% is acceptable as Normal Issue 2: Can a DTRE manufacturers/exporters declare "approxi mate" input/output ratios, and anticipated wastage under Rules 297(1)(ii) of DTRE Rules, 2001. C.B.R.'s clarification Yes the DTRE manufacturers/exporters declare "approximate" input/output ratios and anticipated wastage. The same is, however, accountable in the reconciliation statement (to be shown under rule 304). Issue 3: As times, the export order from a buyer is cancelled but an order from other buyer is available. Substitution of export contracts may be allowed. C.B.R.'s clarification The existing Rules allow substitution of export contracts under intimation to the Collector of Custom. Issue 4: DTRE approval for imports and local procurement should be made available to indirect export as well C.B.R.s' clarification It is already available under the DTRE Rules, 2001. The definition of "exports" cover "indirect exporters" as well Issue 5: Are "Trims" and "Accessories" 'allowed to be imported under DTRE. C.B.'R.s' clarification Yes "Trims" and "Accessories" allowed covered in the term "Input Goods" (Rule 296(1)(f). Issue 6: It is not clear whether purchase of input goods from domestic supplies by an exporter, being zero-rated, shall be free of sales tax and entitled to input tax credit/refund of input tax paid by him. C.B.R.s' clarification It is clarified that under Rule 297(8) purchases of input goods from domestic supplier by an exporter being zero-rated, shall be free of sales tax. Being zero rated, input tax credits/ refunds are also available. Issue 7: Can a unit operate part of its capacity production under DTRE scheme while simultaneously operating the balance capacity production under the normal regime. C.B.R.s' clarification Yes. There is no restriction under DTRE Rules, 2001 on availing two or more schemes. An exporter can avail other schemes besides DTRE regime simultaneously provided separate records/ accounts are maintained for each scheme. Issue 8: In case of two approvals can the exporters use items of both approvals to make exportable goods under anyone of the two or for the third approval. C.B.R.'s clarification Yes. Such an arrangement is admissible under DTRE Rules. Issue 9: Collectorates do not accept export order or contract and resort to verification of those contracts orders, which make the process very cumbersome and time consuming. C.B.R.s clarification Under DTRE Rules, 2001, there is no condition of any kind of verification of export contract/ order from abroad. More under the provisions of sub-rule (4) of Rule 297, a direct exporter can get DTRE approvals on the basis of past export performance without furnishing an export contract/order. Issue 10: For the manufacturers of identical goods, inputs goods imported under one DTRE approval may be allowed to be used for another DTRE approval/export order. C.B.R.s' clarification Under the provision of sub-rule'(2) of Rule 300 of DTRE Rules, 2001, an exporter may transfer his duty and tax free input goods to another DTRE approved exporter of the same goods. The input goods so obtained shall be utilized as per Rule 298. Issue 11: Can the DTRE manufacturer obtain duty and tax free goods from private bonded warehouse. C.B.R.'s clarification Yes. There is no bar on procurement of approved input goods from Banded Warehouse under DTRE Rules, 2001. 2. This information is being passed on to you as part of our regular dissemination programme in lieu of the monthly retainership: