information on Implementation and
administration
of the agreement on customs valuation
Check-list of Issues
Pakistan
The following communication,
dated 8 April 2025, is being circulated at the request of the delegation of Pakistan.
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1._
Questions concerning Article 1:
(a)_
Sales between related persons:
(i)_
Are sales between related persons subject
to special provisions?
Yes, sales
between related persons are subject to the provisions of section 25(1)(d) of
the Customs Act, 1969 read with rule 116 of the Customs Rules 2011, whereas the
expression 'related persons' is defined under rule 2(g) of the Customs Rules,
2001. These provisions correspond to Articles 1.2 and 15.4 of the WTO Agreement
on Customs Valuation (Agreement on the Implementation of Article VII of the
GATT).
(ii)_
Is the fact of intercompany prices prima
facie considered as grounds for regarding the respective prices as being
influenced?
No, the
intercompany prices prima facie
are not considered as grounds for regarding the respective prices as being
influenced. Section 25(3) of the Custom Act, 1969 obliges the authorities to
accept the transaction value even where the buyer and seller are related
persons, provided the importer demonstrates that the relationship did not
influence the price.
(iii)_
What is the provision for giving the
communication of the afore-mentioned grounds in writing if the importer so
requests? (Article 1.2(a))
Under
sub-section (4) of section 25 of the Customs Act, 1969 an appropriate officer
of Customs is required to inform the importer of his reservations in writing
and give the importer an opportunity to justify the price difference.
(iv)_
How has Article 1.2(b) been implemented?
Article 1.2(b)
of the WTO Agreement on Customs Valuation has been implemented under Clause (b)
of sub-section (3) of section 25 of the Customs Act, 1969.
(b)_
Price of lost or damaged goods:
Are there any special provisions or
practical arrangements concerning the valuation of lost or damaged goods?
Section
27 of the Customs Act, 1969 delineates the procedure of valuation of lost, damaged
or deteriorated goods.
2._
How has the provision of Article 4 to allow
the importer an opinion to reverse the order of application of Articles 5 and 6
been implemented?
Sub-section
(10) of section 25 of the Customs Act, 1969 provides that sequential order of
the sub-sections (7) and (8), i.e. deductive and computed value methods,
respectively, may be reversed on the request of the importer.
3._
How has Article 5.2 been implemented?
Clause
(c) of sub-section (7) of section 25 of the Customs Act, 1969 provides that if
the value of goods cannot be determined by similar or identical goods methods
then it shall be determined based on the unit price at which goods are sold in
the greatest aggregate quantity to persons who are not related.
4._
How has Article 6.2 been implemented?
Subsection
(8) of section 25 of the Customs Act, 1969 read with rule 120 under Chapter IX
of the Customs Rules, 2001 provide for the computed value method for
determining the customs value. The said rule 120 further elaborates that the
cost or value, amount for profits and general expenses etc. shall be determined
on the basis of information supplied by, or on behalf of, the producer. It
shall be based on the commercial accounts of the producer, provided that such
accounts are consistent with the generally accepted accounting principles
applied in the country where the goods are produced.
5._
Questions concerning Article 7:
(a)_
What provisions have been made for making
value determinations pursuant to Article 7?
Subsection
(9) of Section 25 of the Customs Act, 1969 states that if the customs value of
the imported goods cannot be determined under subsections (1), (5), (6), (7)
and (8), it shall, subject to the rules, be determined using reasonable means
on the basis of a value derived from among the methods of valuation set out in
subsections (1), (5), (6), (7) and (8) that when applied in a flexible manner
to the extent necessary to arrive at a customs value.
(b)_
What is the provision for informing the
importer of the customs value determined under Article 7?
Rule
109(3) of the Customs Rules, 2001 provides for informing the importer of the
customs values determined.
(c)_
Are the prohibitions found in Article 7.2
delineated?
Prohibition
of Article 7.2 are clearly delineated in Rule 110 of the Customs Rules, 2001.
6._
How have the options found in Article 8.2
been handled? In the case of f.o.b. application, are ex-factory prices also
accepted?
Subsection
(2)(a) of section 25 of the Customs Act, 1969 provides for inclusion of cost of
transport, loading, unloading and handling charges associated with the
transport of the imported goods, and the cost of insurance, if already not
included in the price.
7._
Where is the rate of exchange published, as
required by Article 9.1?
For the
purposes of determining the value of goods, subsection (2) of section 31A of
the Customs Act, 1969 provides that the rate of exchange at which any foreign
currency is to be converted into Pakistan currency shall be the rate of
exchange in force on the date immediately preceding the date on which goods
declaration etc. is filed.
Furthermore,
the rate of exchange is published by the State Bank of Pakistan on daily basis,
and can be accessed by using this link: https://www.sbp.org.pk/ecodata/rates/m2m/m2m-current.asp.
8._
What steps have been taken to ensure
confidentiality, as required by Article 10?
In accordance
with the provisions of Article 10 of the WTO Agreement on Customs Valuation,
rule 124 of the Customs Rules, 2001 requires that all information which is by
nature confidential or which is provided on a confidential basis for the
purposes of customs valuation shall be treated as strictly confidential by the
authorities.
Moreover, under
section 155H of the Customs Act, 1969, the customs authorities are obliged to
treat all trade information gathered during clearance of goods as confidential.
9._
Questions Concerning Article 11:
(a)_
What rights of appeal are open to the
importer or any other person?
Right of appeal
to Collector (Appeals) against assessment order including valuation of goods is
available under section 193 of the Customs Act, 1969, while right of a further
appeal, inter alia, against the orders of Collector (Appeals) is established
under section 194A of the Customs Act, 1969, wherein an aggrieved party
including an importer may file an appeal before the Appellate Tribunal,
established under section 194 of the Customs Act. By way of an additional
remedy, Section 196 of the Act provides that any aggrieved party including
importer may file a reference before the concerned High Court against an order
of the Appellate Tribunal.
(b)_
How is he to be informed of his right to
further appeal?
Right of appeal
at higher forums is clearly mentioned in every order along with the number of
days available to file an appeal.
10._
Provide information on the publication, as
required by Article 12, of:
(a)
(i)_
The relevant national laws:
The
Customs Act, 1969 is the relevant national law on customs valuation. Act, as
amended from time to time, is promptly published in the official gazette of
Pakistan as well as on the official website of the Federal Board of Revenue.
The Act may be accessed by using the following link:
https://download1.fbr.gov.pk/Docs/202410210101439426CustomsAct1969updated30.06.2024.pdf.
(ii)_
The regulations concerning the application
of the Agreement;
The
regulations concerning the application of the WTO Agreement on Customs
Valuation are contained in the Customs Rules, 2001, as amended from time to
time. The regulations are published in the official gazette of Pakistan and on
the official website of the Federal Board of Revenue, mentioned above. The
Rules can be accessed by using the following web link:
https://download1.fbr.gov.pk/SROs/201610251510913232Updated-450-2001-2015-16-RULES.pdf.
(iii)_
The judicial decision and administrative
rulings of general application relating to the Agreement;
All judicial
decisions are supplied to the parties and are published on the websites of the
relevant judicial fora, i.e. High Courts and the Supreme Court, and are also
published in renowned law journals, e.g. Pakistan Law Digest (PLD). Similarly,
the administrative rulings, as and when issued, are published on the official
website of the Federal Board of Revenue.
(iv)_
General or specific laws being referred to
in the rules of implementation or application.
No other
general or specific laws are referred to in our legislation (Customs Act, 1969
and Customs Rules, 2001) concerning implementation of the WTO Agreement on
Customs Valuation. The relevant laws and rules on customs valuation, as amended
from time to time, are published and can be found in the above-mentioned
publications or sources.
(b)_
Is the publication of further rules
anticipated? Which topics would they cover?
No
further publication of rules is anticipated.
11._
Questions concerning Article 13:
a)_
How is the obligation of article 13 (last
sentence) being dealt with in the respective legislation
Section 81 of the
Customs Act, 1969 provides for provisional determination of Customs Value where
it becomes necessary to delay the final determination of such customs value. In
such cases, duty, taxes and other charges payable are determined provisionally
against which sufficient guarantee in the form bank guarantee or pay order is
kept by customs which meets the likely differential of duty, taxes and other
charges.
b)_
Have additional explanations been laid down
Additional explanations
on provisional determination have been given under sub-rule (2) of rule 125 of
the Custom Rules, 2001.
12._
Questions concerning Article 16:
(a)_
Does the respective national legislation contain a
provision requiring customs authorities to give an explanation in writing as to
how the customs value was determined?
Section 25(4)
of the Customs Act, 1969 and rule 109 of the Customs Rules, 2001 require the
appropriate officer to inform the importer in writing as to how customs value
is being determined.
(b)_
Are there any further regulations concerning an
above-mentioned request?
Further, rule
109 of the Custom Rules, 2001 clearly requires that when a final decision about
determination of value is made, the appropriate officer shall communicate to
the importer in writing the decision and the grounds thereof.
13._
How have the Interpretative Notes of the
Agreement been included?
The
interpretative notes to the Agreement have been incorporated in the body of the
laws and regulations concerning customs valuation, i.e. section 25 of the
Customs Act, 1969 and Chapter IX of the Customs Rules, 2001.
14._
How have the provisions of the Decision on
the Treatment of Interest Charges in the Customs Value of Imported Goods been
implemented?
The Decision A.3
of the Committee on Customs Valuation pertaining to treatment of interest
charges in the custom value has been implemented under rule 113 of the Custom
Rules, 2001 read with subsections (1) and (2) of section 25 of the Customs Act,
1969. As such, interest charges are not regarded as part of the additions to be
made when determining the customs value of imported goods.
15._
For those countries applying paragraph 2 of
the Decision on the Valuation of Carrier Media Bearing Software for Data
Processing Equipment, how have the provisions of this paragraph been
implemented?
In line with
paragraph 2 of the decision of the Committee on Customs Valuation dated 24 September 1984,
only the cost or value of carrier medium is taken into account while
determining the import duty of imported carrier media bearing data or
instructions (software), in accordance with the provisions of section 25 of the
Customs Act, 1969 and the rules under Chapter IX of the Customs Rules, 2001.
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