MCC Appraisement East recommends streamlining of duty structure

KARACHI: MCC Appraisement East in its proposals for the Federal Budget 2017-18 has recommended increasing rate of customs duty on certain importable goods as a revenue measure as well as uniform treatment of similar goods.

In order to simplify the tariff structure and reduce chances of mis-declaration and to do away lab test requirements, its is proposed the rate of duty on synthetic organic coloring matter under HS Code 32.04 should be raised to 16 percent from existing 3.0 percent.

Prepared driers for leather are classified under PCT 3211.0010 at 11 percent customs duty, whereas;  prepared driers other than leather are classified under PCT 3211.0090 (other) where duty is 20 percent. Instances have been reported to misclassify driers other than leather as leather driers. Therefore, in order to forestall the chances of mis-declaration, it is proposed that the rate of duty be rationalized at 20 percent on PCT 3211.0010. It will also have positive revenue implication

Printing ink is classified under HS Code 32.15.  Roller coating printing ink (black) classified under PCT 3215.1110 is at 16 percent, whereas; other printing ink under PCT 3215.1190 is at 20 percent.  The difference in custom duty has no rationale and provide opportunity for mis-declartion. In order to rationalize tariff structure and to bring parity between two headings, it is proposed that  duty may be enhanced on PCT 3215.1110 at 20 percent.

Flat rolled products of Alloy and Non Alloy Steels are separately classified in Tariff, but these cannot be identified with naked eye. Duty impact on most of such tariff lines have been equated to avoid mis-declaration, however the difference persists on this PCT. To prevent classification dispute between Alloy Steel (7226.9100) and non-alloy steel of less then 600 mm (7211.1990) regulatory duty at12.5 percent is proposed to equate duty impact.

It may be mentioned here that China FTA rate on PCT 7211.1990 is 5.0 percent, whereas on PCT 7226.9100 is 0 percent.

Rotary positive displacement pumps are classified under PCT heading 8413.6000. Geared Pumps are also sub-category of Rotary positive displacement pumps, so these are presently incorrectly classified under 8413.8000 as “Other Pumps”. It is proposed that PCT heading 8413.8110 may be omitted and new sub-headings 8413.6010 (Geared Pumps) & 8413.6090 (Other) may be created.

Auto parts attract 35 percent rate of duty across the tariff. Presently compressors used in automotive vehicles are classified under general category of compressors under PCT 8414.3010. It is proposed that  compressors for automotive vehicles may be separately classified with 35 percent customs duty. For this purpose, 8414.3010 may be renamed as “Compressors for Automotive vehicles” and another sub-heading 8414.3020 may be created for “Other used with HCFC and non-CFC gases”.

Domestic appliances attract customs duty of 20 percent. Quantum of import is very high and major share is by commercial importers. As benefit of Pak China FTA (0%) is also available on this PCT so 5.0 percent regulatory duty is proposed as a revenue measure.

Relays of automotive vehicles should be classifiable under different PCT Headings, and should attract 35 percent duty. Current PCT 8536.4100 should be split into 2 sub-headings 8536.4110 (Auto relays) & 8536.4190 (Other for a voltage not exceeding 60 V) with customs duty of 35 percent and 3.0 percent, respectively.

Insect Killers are being imported having different technologies like Infrared and Ultravoilet, etc. Infrared Insect Killers are specifically mentioned in this heading and are rarely imported, while UV  Insect Killers and other types (in racket shape) are being imported. These other types are presently classified in ‘Others’ having 3.0 percent customs duty. It is proposed that the word “infrared” may be deleted from the description, and only “Insect killers” should remain to cover all types of insect killers.

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