Pakistan customs have raised the import trade price (ITP) of three steel products by 60 percent, or $241 per ton, on the back of rising steel prices in the world market, sources said. The ITP/values are determined under section 25A of Customs Act, 1969, for implementation.
Directorate General of Customs Valuation has advised all Collectors of Customs to ensure assessment of the goods as per new determined values. However, if the declared/invoice value is higher, then the same will be applied for assessment purpose. Sources said new values were announced by the Directorate General of Customs Valuation on Thursday and new values will remain valid until revised.
ITP of three secondary quality flat rolled iron and steel products including Hot Rolled Coiled (HRC), Cold Rolled Coiled (CRC) and Galvanised Products Sheets (GP Sheets) has already linked with London Metal Bulletin (LMB) for valuation for duty imposition. Customs valuation has raised the ITP of three products by 45-60 percent or $232-241 per ton.
Customs has increased ITP of HRC by 60.51 percent, or $236 per ton, to $626 from $390 per ton. CRC valuation has risen by 51.55 percent, or $232 per ton, to $682 per ton from $450 per ton. In addition, the ITP of GP sheets has gone up by 45 percent or $241 per ton to $776 per ton from $535 per ton.
HRC, CRC and GP Sheets are used mainly for further working and fabrication of angles, flat bars, terminal tank, bodies of machinery, pipes for water and oil for use in industry, overhead water tanks, electrical equipments, etc. After the issuance of new ITP/values, the evaluation of taxation would be on the new price, which would make the steel products more costly in the domestic market, sources said.
"Value of HRC, CRC and GP Sheets (Secondary Quality) was determined vide Valuation Ruling dated 09-07-2009 and said ruling was taken up for revision as prices of these items were showing upward trend," a notification issued by Custom Valuation said. Meetings with all stakeholders were fixed five times but no one attended, and only requests for further adjournment were received from stakeholders.
Therefore, a final meeting was called by Customs Valuation on February 3, 2010 and customs asked all stakeholders that no further adjournment will be granted and if they do not attend and give their point of view, the value will be decided on the basis of available record.
Final meeting was held as per schedule and was attended by the representative of Pakistan Steel Mills, representative of MCC (Appraisement), MCC (PACCs) and MCC (Port Qasim). The representative of Steel Mills contested the discount being allowed to arrive at the price of secondary quality products and proposed a discount of §6/s on the price of prime quality published in reputed journal.
"All efforts were made to provide opportunity to the importers to provide their point of view but they chose not to avail such opportunity and instead tried to delay revision of values as the international prices were showing rising trend," Customs Valuation notification said.
However, after the meeting some of the importers insist that existing values as determined vide earlier Valuation Ruling may be maintained. According to customs valuation ruling issued on February 11, 2010, import data has been examined and physical import clearance data of prime quality HRC, CRC and GP Sheets was also available.
In order to determine justifiable discount on secondary quality goods over prime quality goods, price list issued by Pakistan Steel Mills has been consulted which indicates that they categorise secondary quality products in two categories ie secondary-A category and secondary-B category.
Their pricing mechanism indicates that secondary-A quality products are charged 1 percent below respective thicknesswise prices of prime quality products. In some products they charge 2 percent below the price of prime quality products. Similarly, secondary-B quality products are charged 10 percent less than the price of prime quality products of respective dimension and year of manufacture.
In order to determine prices of secondary quality HRC, CRC & GP Sheets it would be appropriate that average value of prime quality goods is taken as benchmark and justifiable discount is allowed thereon. The industry standard appears to be allowing discount of 1 percent, 2 percent or 10 percent.
Various factors determined by mills for classification of their products. Since these goods are used for further working and fabrication mainly for industrial purpose, in this case 10 percent discount on customs value of prime quality goods can be allowed.
Keeping in view customs value of prime quality products, industry standards for allowing discounts on secondary quality goods and all other relevant factors new ITP/values are determined under Fall Back Method as envisaged under Section 25(9) Ibid for secondary quality HRC, CRC and GP Sheets, the notification concluded.
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