The Head/Principal Offices of All
Authorized Dealers in Foreign Exchange.

Dear Sirs,

COLLECTION OF EXPORT DEVELOPMENT SURCHARGE
(EDS) THROUGH BANKS

In terms of Government of Pakistan, Revenue Division’s Notification SRO 10(1)/2003 dated January 04, 2003 (Annexure-I), it has since been decided that effective from
6th January 2003 the Export Development Surcharge (EDS) would be collected by the Authorized Dealers on export of all goods, except where EDS is exempted, at the time of realization of export proceeds instead of the Customs Authorities at the time of shipment.

2. You are, therefore, advised to adopt the following procedure: -

(i) The date for switching over the collection of EDS from the Customs to the Authorized Dealers would be the 6th January, 2003. For shipments before the 6th January, 2003, the Customs would continue to collect the EDS and for shipments from 6th January, 2003 onwards the Authorized Dealers would collect the EDS on realization of export proceeds.

(ii) EDS will be collected, in full, by the Authorized Dealers at source from the rupee amount converted from the FCY on receipt of the full export proceeds. The applicable rate in terms of the above-mentioned Notification will be 0.25% of the FOB value realized at the applicable exchange rate prevailing on the date of realization of export proceeds.

(iii) In case of partials/short realization of export proceeds, the EDS would be collected by the Authorized Dealers at the applicable rate i.e. @ 0.25% of the full FOB value of the goods shipped converted into Pak. Rupees at the exchange rate prevailing on the date of first partial/short realized amount. Under such circumstances any further realization on account of the same shipment would not attract any EDS.

(iv) The EDS so collected by the Authorized Dealer will be deposited, alongwith duly filled in enclosed schedule placed at Annexure-II, by the Authorized Dealer either on consolidated basis after collection from the branches or directly by the branches, within 72 hours of deduction, for credit to Federal Government under sub-head-0213300-Export-Development Surcharge maintained with NBP, FTC Branch, Shahrae Faisal, Karachi.

(v) In case of non-realization of export proceeds on due date in terms of sale contract or within 180 days from the date of shipment, whichever is earlier, the banker will have to report the same to the Customs Authorities on the schedule attached at Annexure-III.

(vi) In case of subsequent realization of an overdue export proceeds on which EDS has not been collected earlier and has been reported under para (v) above, EDS would be collected as per the same procedure as laid down in para (ii), (iii) & (iv) above.

(vii) Authorized Dealers will be entitled to charge Rs.80/- (Eighty rupees) per transaction separately from the exporters in consideration of the services rendered by them.

(viii) Authorized Dealers would keep all relevant data/record for on-site inspection by the inspector from the Banking Inspection Department of the State Bank.

3. Authorized Dealers are advised to bring the same to the notice of all their constituents.

Encl as above: Annexure I,II & III