Pakistan relaxes duration for duty-free imports to 18 months

Pakistan has extended the duration of its duty-free scheme from nine months to 18 months, a move aimed at lowering costs and supporting exporters, particularly small and medium-sized enterprises.

Under the revised policy, exporters can import inputs without paying duties and taxes, provided the materials are used within the new 18-month timeframe. Previously, exporters were required to utilize such inputs within nine months under the Export Facilitation Scheme (EFS).

Officials said the longer period would ease financial pressure on exporters and improve operational flexibility. An additional six-month extension may also be granted on a case-by-case basis by a designated committee.

To prevent misuse of the scheme, exporters will now be required to submit reconciliation statements every six months detailing input usage and export performance.

Authorities said the decision followed a review of historical EFS data and comparisons with regional benchmarks.

The change also resolves a backlog of 7,932 goods declarations that had exceeded the earlier nine-month limit. With the extension in place, these declarations are now eligible under the scheme.

The government introduced further measures to streamline the process, including automatic replenishment of security deposits based on exported goods and a new right of appeal for EFS users to the chief collector against decisions by regulatory collectors.

The amendments have been proposed by the Federal Board of Revenue, which has invited public feedback within two days of publication in the official gazette.