The Federal Board of Revenue has finalised proposed changes in the Pakistan Customs Tariff (PCT) to bring Pakistan's customs notifications/PCT, etc, in line with the revised HS Code-2012 of the World Customs Organisation (WCO). Sources told Business Recorder here on Friday that the HS Code is 'Harmonised Commodity Description and Coding System'.
The FBR has finalised a plan for implementation of WCO's revised HS nomenclature HS-2012, taking into account the (amendments to the harmonised system nomenclature) of the WCO. These changes would be of technical nature, which would have nothing to do with the revision in the rates of customs duty. By bringing Pakistan's HS Codes in line with the WCO revised HS Code-2012, the government would only make technical changes in the Pakistan Customs Tariff, import notifications and customs notifications, etc.
At present, the 2007 version of the HS-Code is applicable, and WCO revises the HS codes after every five years, in view of technological advancements. In this periodic revision by WCO, the entire HS Code structure is revised in view of technological and trade developments. Under the revised WCO's tariff regime, the HS-6 changes have been made at over 300-500 places, which would result in national changes at HS-8 (PCT Codes) at numerous places. The Explanatory Notes to Chapters 1-97 of the Pakistan Customs Tariff are also revised. The corresponding changes at national level to be incorporated include HS-8 (PCT Codes) structure is revised at more than a thousand places, and tariffs to be adjusted/rationalised. The FBR has proposed revised tariff structure (PCT Code 2012 and descriptions) and corresponding amendments in regulatory notifications.
The FBR has duly considered the nomenclature and classification (amendments to the harmonised system nomenclature) of the WCO. The WCO's document shows those parts of the Harmonised System, which are affected by the WCO Council Recommendation of 2009 to amend the Harmonised System. This publication of WCO contains the tables correlating the 2007 and 2012 versions of the Harmonised System (HS), as drawn up by the World Customs Organisation Secretariat in accordance with instructions received from the Harmonised System Committee.
According to the WCO's document on amendments to the harmonised system nomenclature, the preamble to the International Convention on the Harmonised Commodity Description and Coding System emphasises the importance of ensuring that the Harmonised System is kept up to date in the light of changes in technology and patterns of international trade. Article 7 of the Convention further states that it is for the HS Committee to propose such amendments to the Convention as may be considered desirable, having regard, in particular, to the needs of users.
At its First Session, the HS Committee decided to set up the Harmonised System Review Sub-Committee, which has the task of revising the HS in accordance with the Committee's general indications and preparing the necessary amendments to the HS Nomenclature. The Committee also agreed to allow an interval of four to six years between each Recommendation amending the HS Nomenclature under Article 16 of the Convention.
In this context, it was decided to affect a general review of the HS Nomenclature, and a draft amendment was submitted to the Council by the HS Committee on the basis of the texts drawn up by the Review Sub-Committee. All recommended amendments were deemed to be accepted and will be forced in 2012 in accordance with Article 16.4 (b) of the Convention, WCO said.
WCO stated that after the acceptance of those amendments, the Contracting Parties noticed that certain consequential amendments were needed to correct factual errors or omissions. Therefore, several corrigendum amendments were also adopted. These corrigendum amendments have been identified in the middle column of the part regarding the "Explanation of the Amendments".
It is to be noted that, as agreed by the HS Committee, the corrigendum amendments will not be binding on the Contracting Parties until they enter into force under Article 16 of the HS Convention. Nevertheless, under the corrigendum procedure, the Contracting Parties will be free to apply the corrigendum amendments from 2012 to reflect the situation as from that date.
WCO said that the recommendation is the fifth to amend the Harmonised System under the Article 16 procedure since the Council approved the Harmonised System Convention in 1983, though it is only the fourth to make major amendments of the Harmonised System. This Recommendation includes 220 sets of amendments, divided as follows: agricultural sector 98; chemical sector 27; paper sector 9; textile sector 14; base metal sector 5; machinery sector 30; other sectors 37.
Environmental and social issues of global concern are the major feature of the HS 2012 amendments, particularly the use of the HS as the standard for classifying and coding goods of specific importance to food security and The early warning data system of the United Nations' Food and Agriculture Organisation (FAQ). The volume of amendments within, for instance, Chapter 3, for the separate identification of certain species of fish and crustaceans, molluscs and other aquatic invertebrates, s substantial. However, the modifications aim at improving the quality and precision of trade data in these commodities. The amendments include, inter alia, improved specifications for species from the Southern hemisphere. These amendments will enable economic trends in products other than those familiar to North Atlantic consumers to be monitored. In the same vein, new subheadings have been created for the separate identification of certain edible vegetables, roots and tubers, fruit and nuts, as well as cereals, WCO said.
The HS Nomenclature 2012 Edition also features new subheadings for specific chemicals controlled under the Rotterdam Convention and ozone-depleting substances controlled under the Montreal Protocol. The HS Nomenclature's objectives include the facilitation of international trade and the collection, comparison and analysis of trade statistics. To achieve these objectives, the stability of the HS structure and the historical continuity of trade statistics have to be maintained.
Given the intervals at which the HS is reviewed and the scale of the amendment introduced in the framework of the previous review cycles and their impact on the structure of the HS Nomenclature, it proved necessary to lay down general principles regarding the numbering of new or modified subheadings and the reuse of deleted code numbers, WCO said.
It was therefore decided to adopt the following rules provided they are compatible with the structure of the HS:
(a) Code numbers are changed only where there is an amendment to the text of a heading or subheading and where there is a significant change 01 scope in the subheading(s) concerned.
(b) The renumbering referred to in (a) above is confined to the specific subheadings (at one-dash level, fifth digit; or at two-dash level, sixth digit); the code numbers of those residual subheadings whose scope has been amended remain unchanged.
(c) The code numbers of deleted subheadings are not reused until a certain period has elapsed, unless unavoidable, WCO maintained.
It become clear, however, when finalising the amended texts that the structure of the HS does not allow a uniform and systematic application of these principles, certain subheadings have been significantly modified in scope but retain the same code number. For example, code number 3002.10 has been maintained though the subheading has been expanded to cover other immunological products which are directly involved in the regulation of immunological processes, WCO added.
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