Guidelines for market survey to determine Customs values issued

KARACHI: The Directorate General of Customs Valuation has issued guidelines for conducting market survey pertaining to determination of valuation rulings and has defined the responsibilities of directors and assistant directors.
According to the guidelines, the pre-survey preparations would include constitution of Market Survey Team by the Additional Director concerned comprising of two Principal Appraiser and one Valuation Officer; in case of highly sensitive items, the Director, Customs Valuation may designate a Deputy/Assistant Director as head of the Survey Team.
The concerned Deputy/Assistant Director shall be responsible for identification of origin-wise categories/varieties/grades of goods as per import data; undertaking internet research regarding technical and price aspects of goods; identifying major importers and brands in liaison with the groups and examination sections of clearance Collectorates; identifying market mechanisms for goods under survey, to identify aspects of sole distribution franchise, and any other element impacting market price; identifying target markets/sources of information; selecting the largest possible market to ensure fair play and accuracy of results; determining the best time for survey to ensure gaining maximum possible information in minimum possible time; identifying all special aspects to be investigated, depending on the nature of goods under survey and preparing an exhaustive list of questions covering all aspects required to arrive at correct market value of goods.
The concerned deputy/Assistant Director shall be responsible for providing guidance to the Survey Teams and shall also be responsible for monitoring day-to-day activities of the Survey Teams. in case of serious omission or commission on the part of the Survey Team, he/she shall bring the same to the knowledge of Additional Director concerned.
The Survey Method defined by the guidelines would comprise of several steps including recording origin-wise market values and specific descriptions of all categories/varieties/grades of goods under survey; recording market values of all available weights/volumes/units of measurements; recording market values of all available modes of packing, such as tin packs, soft packs in case of edible items etc.; identifying new products not reflected in the import data or previous Valuation Rulings; identifying all variables impacting market value, such as seasonal demand, temporary supply/ demand variation, wastage/breakage, and quantifying their impact on market value.
In respect of all he afore-mentioned Market Survey components, the survey team shall obtain cash memos wherever possible; otherwise, the Survey team shall record, in legible handwriting, both the wholesale and the retail prices on the respective business cards of the business outlets, and such business cards shall be duly signed and dated by both members of the team, to be made a part of official Valuation record.
Where deemed necessary, the stakeholders may be associated in Market Survey exercise with the prior permission of the Director, Customs Valuation.
Post-survey methodology defined by the guidelines include recording origin-wise market values of goods as detailed above, after calculating and accounting for impact of variables on market value; recording all sources of information against individual market values; preparing detailed worksheets pertaining to the work-back method under Section 25(7) of the Customs Act, 1969, in respect of all market values obtained, incorporating therein specific profit margins for each stage of value-addition, i.e., retail, wholesale, import, etc., along with transportation charges, incidence of duty and taxes, and all other components liable to be deducted under Section 25(7) ibid; preparation of a comprehensive Market Survey report, including but not limited to all the afore-mentioned aspects, and submission of this report, duly signed by the Valuation Officer and Principal Appraiser.
This Survey Report shall be countersigned by the Deputy/Assistant Director. He/she shall submit the Survey Report to the Additional Director within 07 days of completion of the Market Survey.
The concerned Additional Director shall be responsible to determine timelines for submission of the Market Survey Report by the Market Survey team to the Deputy/Assistant Director, which shall in no case exceed 7 days and monitor progress and direction of the survey by the Survey Teams by holding formal meetings with the concerned Deputy/Assistant Directors and the members of the Survey Teams at least once a week. The minutes/details of such meetings would be recorded in the concerned file of Survey. Through such meetings, the Additions Director shall ensure quality of the Survey. It shall also be ensured that the time lines as given above are met by all concerned. The Additional Director where necessary, may discuss certain important aspects of the Market Survey Report with the Director before formally submitting the same. Survey Report shall be submitted to the Director within 3 days of receipt of the same from the Deputy/Assistant Director.
This is for the first time that such guidelines have been issued and it is the part of the initiative taken by the Customs against under-invoicing, which is being pursued in the entire Customs. It was also learnt that FBR is considering to declare Saturday a working day for the Valuation Department.

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