The
Government of Pakistan has accorded “deemed export” status
to the foreign earnings remitted into Pakistan against consultancy
services in various service sectors of
economy such as medical, pharmaceutical, engineering,
accountancy, management, financial services, wholesale, distribution
and retail trade, transportation, storage and communication,
tele-communication services, educational services, real estate
development, hotel and tourism/tourism related services, technical
testing facilities and consultancy services etc. which are
being rendered by various Pakistani enterprises by way of
designing, solution providing, surveys, feasibility preparation,
marketing and promotional activities including local market
analysis, studies, product development, handling of / and
transfer of technology assignments, warehousing, manufacturing
and distribution etc. on behalf of their foreign principals.
The foreign earnings against all such consultancy services
would now henceforth be treated as export proceeds and all
consultancy services mentioned above would qualify for export
finance facility under Part I of Export Finance Scheme for
a period not exceeding 180 days at the rates prescribed under
the Scheme. The
facility would be available on case by case basis to qualifying
enterprises / companies.
The concerned enterprises would, therefore, have to
determine their financing needs against agreement / contract
executed by them for providing consultancy services to their
principals and would be required to liquidate the same from
the repatriation of export proceeds received from their principal
/ buyer abroad, while the facilities under Export Finance
Scheme shall be available for the maximum period of 180 days.
The banks are advised to provide financing facility to the
qualifying enterprises under the Export Finance Scheme. The
realization of proceeds against consultancy services rendered
by the company shall be made as prescribed by our Exchange
Policy Department.
2.
Accordingly, since exports from Pakistan are subject
to ‘E’ form procedure, the ‘E’ form cannot, however,
be made applicable to the export of services rendered by supplier
of above consultancy service providers as such type of exports
do not take place physically. As such, the respective consultants
will intimate to their banker on the following format the
details of export of services :-
Name
of the foreign buyer |
Nature
of Services |
Date
and period of the service contract |
Amount
of the service contract |
Expected
period of realization |
Expected
date on which services will be provided.
|
Remarks
|
1.
|
2.
|
3.
|
4.
|
5.
|
6.
|
7.
|
The
Authorized Dealer concerned will maintain a separate record
of such exports and ensure timely repatriation of the export
proceeds on the basis of the instructions contained in Chapter
XII of the Foreign Exchange Manual. A monthly report will
also be furnished
to the Junior Joint Director (General), Exchange Policy Department,
State Bank of Pakistan, Central Directorate, Karachi.
3.
Applications for providing refinance against finances
provided by banks for export of consultancy services to be
rendered by Pakistani enterprises relating to sectors specified
in para 1 above will be submitted by the banks to the concerned
office of the State Bank on format as per specimen attached
duly supported
by the following documents :-
i)
An agreement / contract between the Pakistani
enterprise(s) and their foreign principal specifying
the nature of Consultancy Services to be rendered by the Pakistani
enterprise / company alongwith value of such service, duration
of service involved and the schedule of payment.
ii)
The information as at
i ) above alongwith
the programme of services
to be rendered with period
and cost shall be duly attested by the financing bank.
iii)
Schedule of financial requirements of the borrowing
firm duly attested by the bank with reference to the relative
contract, indicating the amount required at various intervals
in line with schedule at ii) above so as to ensure that the
finance obtained is liquidated within 180 days of its drawing
from the bank.
iv)
Indication of the amount already obtained by the borrowing
enterprise / company by way of advance from their principal
abroad, if any, which shall not qualify for financing as usual.
v)
An undertaking
from the
borrowing enterprise / company
on the enclosed
format (Annexure- A)
vi)
D. P. Note
The
grant of finance shall be subject to the receipt of satisfactory
feedback about the principal from his banker abroad as also
on a declaration from the borrower confirming authenticity
of the contract.
4.
The terms and conditions of Part-I of the Export Finance
Scheme relating to fine, submission of returns and statements
to the State Bank of Pakistan etc. will, mutatis mutandis,
apply in these cases as well.
However, the requirement to export of goods, will be
substituted with the requirement to perform the consultancy
services as per original contract.
5.
As consultancy services would not entail any visible
exports, Authorized Dealers are, therefore, advised to report
realization of services charges against the funds provided
to them by the concerned Office of the State Bank as per arrangements
prescribed by our Exchange Policy Department in the following
new code No. and schedule as under :-
Code
List No.5
Invisible
Receipts
F
- Miscellaneous Services.
Purpose |
Description
|
Schedule |
Code No. |
|
|
|
|
Services
in medicine, medical, pharmaceutical, engineering, accountancy,
management, financial services, wholesale, distribution
and retail trade, transportation, storage and communication,
tele-communication services, educational services, real
estate development, hotel and tourism/tourism related
services, technical testing facilities and consultancy
services etc - Export of. |
Remittance
- receipt of Export Services
|
J
/ 0-3 |
9563 |
6.
The following documents will be required to be submitted
within 30 days
from the expiry of the loan or liquidation of the facility
if repaid earlier then the maturity of the loan, whichever
is earlier to SBP as evidence of performance under the relevant
contract / agreement:-
a)
Copy of Invoice(s) raised against the services made.
b)
EPRC / Credit Advice.
c)
Form at Annexure - D
Please
acknowledge receipt.
Annexure-A,B,C,D. |