The Directorate-General of Customs Valuation, Karachi has conveyed to the Model Customs Collectorate (MCC), Appraisement Karachi that there is an upward revision from 26 to 4000 percent in customs values on import of auto parts.
In this connection, the DG Valuation has clarified assessment issue of auto parts to the relevant collectorate, reflecting massive increase in customs values on the import of auto parts.
The percentage difference in assessed values and those determined by the DG Valuation showed huge difference. Collectorates were assessing duty on extra-low values as compared to the values determined under section 25-A of the Customs Act.
Sources told Business Recorder on Monday that some vested interests had tried to create wrong impression about the valuation ruling due to enhancement in the customs values on auto parts. Earlier, clearance of auto parts were made on very low customs values which has now been effectively checked by the directorate. This has promptly stopped the phenomenon of group under-invoicing through application of substantially enhanced rates up to 4000 percent. The application of enhanced rates created serious problems for the unscrupulous elements involved in massive under-invoicing of the same item. They also wanted to delay the implementation of the new values determined by the DG Valuation.
Sources said that the same group also managed to convey to the FBR misleading data to further delay the implementation of the new values.
It was deliberately done to misguide the tax authorities on applicability of accurate customs values. However, the directorate is also in the process of reviewing these rates on the directive of the FBR Chairman.
A comparison of values determined by DG Customs Valuation with those currently assessed by the Custom House, Karachi, clearly shows an upward increase in the range of 26 to 4000 percent. A detailed statement highlighting that auto parts of various natures are being assessed by Custom House at values as low as US $0.128/kg, whereas minimum value determined by the DG Valuation is not less than US $1.50/kg.
A sector study regarding valuation of "auto-parts" was initiated by the DG in view of the fact that the prevailing declared/assessed values were not in conformity even with the prices of raw materials used in its manufacturer.
The principal stakeholders ie Indus Motors Ltd, and Paspida were invited for their inputs. Various meetings were held, some of which were also attended by the representative of MCC, appraisement. However, no input of whatsoever nature was provided by him during these meetings. In order to arrive at fair customs values, previous import data was also scrutinised, which did not provide any qualitative assistance because of the phenomenon of group under-invoicing. The "description" of auto parts fed in the PRAL data-base is generally vague, without indicating the name and type (capacity) of vehicles for which these are imported.
Examples of such vague and incomplete description are as below: G.D Machine No 49799, December 06, 2007 (KAPR-Appraisement) Description: "Non-Genuine Auto parts" Value: US $0.30/kg (China).
G.D Machine No 45834, November 23 2007 (KAPR-Appraisement) Description: "Auto Parts" Value: US $0.18/kg (Japan). In view of these unclear descriptions, it was decided to determine the values on the basis of prevailing prices in the local market as provided under section 25(7) of the Customs Act, 1969. Three teams were constituted comprising the representatives of Indus Motors, Paspida and the DG Valuation. The values so determined were duly endorsed by Indus Motor company.
A comparison of values determined by DG Valuation with those currently assessed by the Custom House, Karachi, clearly shows an upward increase in the range of 26 to 4000 percent.
Following few major items indicate the range of increase in values determined vis-à-vis currently assessed values: Pad kit, increase of 50 percent to 713 percent; ring set piston 33 percent to 962 percent; tie rod 37 percent to 260 percent; steering rack 26 percent to 800 percent; hood 151 percent to 435 percent; covered clutch 468 percent; head lamp 154 percent to 894 percent; lens rear (combination lamp) 397 percent; element air filter 491 percent to 4057 percent; fuel filter 133 percent to 1564 percent disc assy clutch , 134 percent to 185 percent; and radiator 21 percent to 120 percent, DG Valuation said.
Comments
Comments are closed.