KARACHI: In a significant development, the customs values assigned to power tools have been rescinded following a contentious Valuation Ruling. On October 3, 2024, the Directorate General of Customs Valuation issued Valuation Ruling No. 1908/2024, which re-determined the customs values for power tools. However, this ruling faced immediate opposition from several importers and stakeholders.
Leading the charge, Faisal Ghani, CEO of Franklin Law Associates, represented a group of five importers—Ashraf Hardware Store, Qitmeer Traders, S.M Tools Centre, Champion Industries Supplies, and Chief Machinery Corporation. They, along with other stakeholders, including Shahjahan Trading Company, Z H Traders, Sharafat Brothers, Shan Enterprises, White Horse, Ayub and Sons, AZ Khalid Trading Agencies, AK Zahid, Hussaini Innovations, and The Lahore Chamber of Commerce & Industry, filed petitions against the higher customs values mandated by the ruling.
The petitioners argued that the new values were unrealistically high compared to actual transaction values and international prices. They contended that the valuation had been standardized to single values, neglecting the diversity of sources from which the goods are imported. The key points of their challenge included:
1. Failure to Account for Weight-Based Criteria: The ruling set values on a per-unit basis, disregarding the weight-based assessment criteria.
2. Lack of Transparency: The ruling was based on a market inquiry not disclosed to stakeholders, relying on outdated information from four months prior.
3. Exclusion of Stakeholders: Many stakeholders, particularly from Lahore, were not included in the valuation proceedings due to communication issues, such as non-functional Zoom links.
4. Inconsistent Categorization: The brand categorizations were not reflective of the predominantly private-label nature of the goods in question.
In response to these concerns, Director General Customs Valuation Muhammad Sadiq Khan ordered the rescindment of Valuation Ruling No. 1908/2024 under Section 25-D, effective immediately. He directed the Customs Valuation Department in Karachi to undertake a fresh valuation exercise in compliance with Section 25A of the Customs Act, 1969. The revaluation process is to be completed within three weeks, ensuring transparency and stakeholder participation.
Until the new ruling is issued, the Clearance Collectorates will assess goods under Section 25 of the Customs Act, 1969. This interim measure aims to balance the interests of the exchequer with the legitimate expectations of traders.
This development underscores the ongoing challenges in balancing regulatory oversight with fair trade practices in Pakistan’s import sector.