Duty Drawback and Export Incentives for Agricultural Exporters in Pakistan — What Can You Claim?

By Olympic AgenciesLast updated: 9 July 2026

Quick Answer

Three main instruments: customs duty drawback (refund on import duties for inputs used in exports), DLTL for rice (9 percent of FOB for Basmati at or above 750 USD per tonne, 5 percent non-basmati, retroactive from 23 January 2026), and Export Facilitation Scheme (duty-free input import for exporters).

Key facts
Duty drawback	Refund of import duties on inputs used in exports, claimed at notified standard rates
DLTL rice scheme 2026	9 percent of FOB for Basmati at or above 750 USD per tonne; 5 percent for non-basmati
DLTL effective date	Retroactively from 23 January 2026 with allocation of approximately Rs 15 billion
Export Facilitation Scheme	Allows duty-free import of inputs for use in export production; confirm current eligibility with FBR
Success depends on	Documentation accuracy — export goods declaration, bank realization proof, and product-scheme alignment

Three instruments can significantly boost export margins for agricultural producers in Pakistan: customs duty drawback (a refund of import duties on inputs used in exports), DLTL (Drawback of Local Taxes and Levies) for rice, and the Export Facilitation Scheme (which allows duty-free import of production inputs). Each has distinct eligibility rules, documentation requirements, and claims pathways — but all hinge on precision and timing. Understanding how each works, what qualifies, and how to navigate the State Bank and FBR processing can be the difference between claiming your incentive and losing it.

What is duty drawback and who can claim it?

Duty drawback is a refund of the customs duties you paid when importing inputs that were subsequently used in producing goods for export. The rationale is straightforward: exporters should not bear the duty cost of inputs that ultimately leave Pakistan. The claim is filed at notified standard rates — the FBR publishes duty rates for common input-output pairings (e.g., cotton fabric exported carries a standard refund rate for imported cotton yarn).

To qualify for duty drawback, you must meet three conditions:

Be a registered exporter with the FBR or the State Bank of Pakistan.
Maintain documented evidence linking the imported inputs to the exported goods.
Realize your export proceeds through banking channels — your buyer's remittance must arrive in your Pakistani bank account or via an irrevocable letter of credit.

Claims are filed through the export goods declaration (EGD) process when your shipment clears Customs for export. The State Bank of Pakistan oversees payment mechanics and processes refunds after verification. For detailed procedures and notified standard rates, consult the State Bank Export Policy circulars. Most exporters engage a customs broker or freight forwarder to file claims; delays often stem from incomplete documentation or mismatches between the declared input and the exported product.

What is the DLTL scheme and what are the 2026 rice rates?

DLTL (Drawback of Local Taxes and Levies) is a rebate of domestic indirect taxes on exports, paid as a percentage of the FOB (free on board) value. For rice, it is a particularly generous incentive — the government uses it to boost competitiveness in export markets and support rice exporters facing global price pressure.

In 2026, the Ministry of Commerce released updated DLTL rates for rice under the Drawback of Local Taxes and Levies for Rice Order, 2026:

Basmati rice exports priced at or above 750 USD per metric tonne: 9 percent of FOB value.
Non-basmati rice: 5 percent of FOB value.
Effective date: Retroactively from 23 January 2026.
Scheme allocation: Approximately Rs 15 billion for 2026.

This represents a significant upgrade. The previous price cap of 1,275 USD per tonne on Basmati was eliminated, opening the incentive to all Basmati exports priced above the 750-dollar floor. The non-basmati rate was raised from 3 percent to 5 percent, doubling the refund for ordinary rice. However, exporters should confirm the scheme's current status before pricing on it — there is active discussion in the industry about extending the scheme beyond 30 September 2026. Check the latest Ministry of Commerce notices and rice exporter communications for status updates.

What does the Export Facilitation Scheme allow?

The Export Facilitation Scheme (EFS) is an FBR scheme that allows registered exporters to import production inputs — raw materials, components, packaging, and auxiliary supplies — without payment of customs duties and taxes, provided they are used in producing goods destined for export. It functions as a duty exemption on input imports, not a refund like drawback or DLTL.

The scheme accelerates cash flow by eliminating upfront duty payments on production inputs, allowing exporters to reinvest capital in growth. However, eligibility is regulated — you must be registered as an exporter, the inputs must match your export product line and be used within a specified timeframe, and FBR reserves the right to audit the input-output link. Regulations change annually and vary by product category. Confirm your eligibility and current EFS rules with the FBR before importing inputs under the scheme.

Instrument	What it refunds or allows	Key 2026 fact
Customs duty drawback	Import duties on inputs used in exports	Claimed at notified standard rates via export goods declaration and State Bank realization process
DLTL for rice	Local taxes and levies as a percentage of FOB value	9 percent for Basmati at or above 750 USD per tonne; 5 percent for non-basmati; effective 23 January 2026
Export Facilitation Scheme	Duty-free import of inputs for export production	Allows registered exporters to import without duties and taxes; confirm current eligibility and registration rules with FBR

How are drawback and DLTL claims actually processed?

The claim workflow differs slightly for each instrument, but all rely on State Bank and FBR coordination. Understanding the sequence prevents missed deadlines and lost incentives.

Duty Drawback Processing:

File the export goods declaration (EGD) with Customs when the shipment leaves Pakistan.
Realize the export proceeds through banking channels — your buyer remits funds to your Pakistani bank account or via an irrevocable letter of credit.
File the drawback claim with Customs (or through your broker) within the prescribed window, typically six to twelve months of export.
Customs verifies the input-output link against import records and export documentation.
Upon approval, the State Bank processes the refund to your designated account.

DLTL for Rice Processing:

Export the rice shipment and ensure the FOB value is declared accurately on the commercial invoice and export goods declaration.
Realize bank proceeds (buyer remits export value to your account).
File the DLTL claim with the Ministry of Commerce or your broker with certified copies of the export documentation.
Claim is verified against rice shipment specifications, price point, variety (Basmati or non-Basmati), and scheme eligibility.
If approved, the rebate is credited to your account or offset against other tax liabilities.

Export Facilitation Scheme Processing:

Seek registration and EFS approval from the FBR (or your zone customs office) for planned input imports.
Import inputs with EFS exemption documentation — no duty or tax is paid at clearance.
Produce the export goods and export them within the permitted timeframe.
Maintain comprehensive records linking imported inputs to exported goods for FBR audit and verification.

Why do export incentive claims fail?

Claims fail for three primary reasons: documentation gaps, timing errors, and product-scheme mismatches. Each is preventable with advance planning.

Documentation: Your export goods declaration, commercial invoice, Bill of Lading, and bank realization letter must be internally consistent and complete. Mismatches — such as declared quantity not matching the B/L, FOB value on the invoice differing from bank realization, or shipping marks inconsistent across documents — trigger rejection or indefinite delay pending clarification.

Timing: Drawback claims must be filed within the prescribed window, or the claim becomes time-barred. DLTL claims must be filed after bank realization of export proceeds. Export Facilitation Scheme inputs must be imported before production begins and goods must be exported within the authorization period. Exporters who miss deadlines forfeit the incentive entirely.

Product-scheme alignment: DLTL rice must meet the scheme's specifications — correct variety (Basmati or non-Basmati), quality standards, and price point. Drawback inputs must demonstrably link to the exported product (cotton yarn to cotton fabric, for example). If a Customs officer questions the connection or product eligibility, the claim stalls pending resolution, sometimes for months.

For agricultural exporters, understanding these mechanics is essential. Learn more about how to export rice from Pakistan and phytosanitary certificate requirements for agricultural shipments to ensure compliance alongside incentive claims.

Olympic Agencies has cleared agricultural exports — seeds, rice, fertilizers, and processed goods — through Karachi Port and Port Qasim since 1982. We help exporters file duty drawback and DLTL claims accurately and on time, maximizing your incentive recovery and supporting your competitiveness in export markets. Ready to optimize your export margins with proper incentive claims? Explore our freight forwarding and export clearance services or WhatsApp us your shipment details and specific incentive questions.

Maximize export margins by claiming duty drawback and DLTL rebates. Verify your eligibility now.

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Frequently Asked Questions

What is duty drawback and who qualifies to claim it?+

Duty drawback is a refund of customs duties paid on imported inputs that were used in producing goods for export. Exporters claim it at notified standard rates through the export goods declaration. Eligibility requires documented input-output linkage and export proceeds realized through banking channels.

Is the DLTL rice scheme still active in 2026 and what are the rates?+

Yes. The Drawback of Local Taxes and Levies for Rice Order, 2026 allows 9 percent of FOB value for Basmati exports priced at or above 750 USD per metric tonne, and 5 percent for non-basmati, effective from 23 January 2026. Exporters are urged to confirm current status before pricing.

Which registered exporters can use the Export Facilitation Scheme?+

The EFS allows registered exporters to import inputs — raw materials, components, packaging — without duties and taxes for use in export production. Confirm your current eligibility, registration status, and product category requirements with the FBR before importing under the scheme.

What documentation do I need to successfully claim drawback or DLTL rebate?+

Successful claims require accurate export goods declarations, proof of bank realization of export proceeds, consistent FOB values across invoice and declaration, and alignment between declared product and scheme-eligible categories. Documentation errors are the leading cause of claim rejection.

Olympic Agencies

Clearing agricultural cargo - seeds, fertilizers, and machinery - at Karachi Port and Port Qasim since 1982. Members of PIFFA and the Chamber of Commerce.