Pakistan Customs has registered an FIR against an Export Facilitation Scheme (EFS) licensed manufacturer-cum-exporter after physical verification reportedly found that its registered manufacturing facility was no longer operating at the declared premises. The company had been permitted to import raw materials duty-free for manufacturing and subsequent export of denim garments under the EFS framework.
According to the reported Customs investigation, the company imported approximately 163,898 kg of raw material, while around 79,963 kg was accounted for through exports. This left an alleged unaccounted balance of approximately 83,935 kg, comprising items such as denim fabric, yarn, buttons and rivets. Customs has calculated the corresponding alleged evasion of duties and taxes at approximately Rs. 52.17 million.
The case carries a wider compliance message for businesses operating under EFS. Duty-free import benefits are closely linked with the declared manufacturing process, maintenance of inventory records and eventual utilisation of imported inputs for qualifying exports. Consequently, reconciliation between imports, production, stocks and exports is becoming increasingly important. Businesses using EFS should therefore treat inventory controls and documentary trails as core tax and customs compliance requirements rather than merely operational records.