Customs Appraisement South prepares proposals for Federal Budget 2016-17

KARACHI: Customs Appraisement South, in their proposals for the Federal Budget 2016-17, has recommended imposition of regulatory duty (RD) in the range of 5.0 percent to 15 percent on various PCT codes to rationalize the duty structure and discourage under-invoicing and mis-declaration.

According to the proposals, the rate of duty against PCT codes with the description of ‘others’ should be at par with the rate of duty against similar goods and codes in the chapter.

For instance, secondary Butyl Acetate is being imported regularly and the imports of N-Butyl Acetate  has diminished remarkably, many importers are declaring Secondary Butyl  Acetate under the heading of “others” in order to avoid incidence of duty. Both are isomers of the same product, with same molar mass but only structural formation difference.

Many goods are regularly being imported under ‘others’ because of the absence of PCT with exact description. It is proposed that a new PCT heading may be created for such products with rate of duty at par with the similar goods.

In order to prevent mis-declaration either new PCT with same rate of duty is proposed or RD be imposed against “Others”.

Currently a high percentage of consignments are being marked for examination, without yielding any detections or value additions. It is suggested to place a statutory  restriction of 10 percent as the  maximum portion of  goods that can be  examined for supporting  the decision making in this  regard.

Through amendments in the Customs Act, Customs Appraisement South has proposed that in some cases where the authorities of correcting the data, extension in warehousing period etc rests with Collector of Customs, the same authorities be given to the Additional Collector.

It has been observed that many consignments are abandoned by the importers after import. The consignees are not traceable for want of complete information. Consignments of waste goods like Rubber & PVC Scrap which are importable subject to certain IPO conditions are imported and abandoned by the importers thus rendering the port areas as dumping grounds of waste/scrap.

Some unscrupolous persons are claiming BL of other importers to block their consignments, because there is no key field linking the filing of Goods declaration with the BL in case the NTN will be collected and reported in cargo manifest, this illegal practice will be controlled.

It is proposed that the Carrier shall be responsible to provide NTN/CNIC/passport  of the consignees of the goods.

It is also proposed the Collector should be authorized to order for verification of the genuineness of any user, before or after issuance of unique user identifier, including verification through biometrics.

The Proposed amendment will empower the Collector for verification of the particulars of any specific user including verification through biometrics. This verification through biometrics can be adopted to check unscrupulous ghost commercial importers & clearing goods on self assessment basis.

As per SRO 1125(I)/2011, sales tax is charged at 3% on import of goods useable as industrial input by manufacturers of the five sectors, whereas in case of commercial importers, value addition tax at 3% shall also be charged in addition to 1% sales tax at import stage. It is suggested that same concessionary rate of sales tax may be specified on import of goods/raw material by manufacturer/ industrial consumers and by commercial importers.

Commercial importers as well as manufacturers/industrial consumers shall be given same treatment for enjoying concessionary rates of sales tax as it is difficult to check genuine manufacturers at import stage.

According to the proposals for federal budget 2016-17, Customs Appraisement South has proposed to omit PCT 9909 may be omitted to limit the number of parcels imported by the same person in a given time duration.

Under PCT 9911, relief goods donated for free distribution among the victims of natural disaster or other catastrophe, as are certified by the authorized officer of Federal/Provincial Government. Plant, machinery and equipment imported by way of donation for installation in the earthquake hit districts as certified by ERRA/National Disaster Management. It is proposed that the authority to issue certification by  Federal/Provincial Government  may be discontinued.

Customs Appraisement South has also proposed amendment in PCT 9913 to prevent misuse of the exemptions by some NGOs by manipulating invoice etc.

PCT 9916 provides exemption from payment of customs duty on import of goods under prescribed description. The term “Goods” has broad meaning and includes consumer goods. The provision is likely to be misused while replacing the consumer durables. There is need to narrow down its scope.

In the PCT heading 9922, facility has been provided to ship spares, stores and equipment imported for use in ships registered in Pakistan under the Merchant Shipping Act, 1923 (XXI of 1923). Now a days ships are being registered by the Mercantile Marine Department under the Merchant Shipping (Registration of Ships), Rules, 2002,  and all present as well as old shipping rules and act have been incorporated in the Shipping Ordinance, 2001. It is proposed that in addition to Merchant Shipping Act, 1923 (XXI of 1923) the words “Shipping Ordinance 2001” may also be inserted.

It is proposed that the exemptions under PCT 9931 on the import of ground handling equipments, service and operation vehicles, catering equipment and fuel trucks not manufactured locally, imported by domestic airlines or by any other service company to which a license has been issued by the Civil Aviation Authority for such purposes, needs to be visited as the private sector has entered into this field and is earning substantial profit owing to the flourishing type of business.

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