Imports during July-March period: record Rs 168.314 billion customs duty collected

Despite only 3.4 percent increase in dutiable imports during July-March (2012-13), the Federal Board of Revenue has made record collection of customs duty of Rs 168.314 billion during this period against target of Rs 150.960 billion for first nine months of 2012-13, reflecting 111 percent growth.
Sources told Business Recorder here on Saturday that the remarkable growth of 111 percent in customs duty collection during July-March (2012-13) is a remarkable achievement of the FBR. This is a historic achievement of the assigned target where 111 percent increase has been witnessed despite merely 3.4 percent increase in dutiable imports. The credit goes to Mohammad Riaz FBR Member Customs and his team of collectors, who worked day and night to surpass the assigned target despite nominal increase in dutiable imports during the period under review. At present there are no surcharges or additional customs duties on imports.
However, the historic achievement has been witnessed during the period under review. This is for the first time that the dutiable imports are declining whereas customs duty collection is increasing day but day during 2012-13. The supervision of the FBR Member Customs at the Board's level with co-ordinated efforts of Collectors of Customs resulted in such an historic event of increase in duty collection with declining dutiable imports.
The data revealed that the FBR has assigned annual target of Rs 222 billion of customs duty for 2012-13. The collection amounted to Rs 168.314 billion, leaving a balance of Rs 53.686 billion during 2012-13. Keeping in view of unprecedented growth in customs duty collection, the FBR would be able to amass the annual target of Rs 222 billion by the end of current fiscal.
The FBR has collected Rs 168.314 billion during July-March (2012-13) against Rs 147.580 billion in the corresponding period last fiscal, depicting a growth of 14 percent. The administrative and enforcement actions have successfully generated a huge amount of Rs 20 billion during this period.
Sources said that the FBR has fixed the budgetary target of customs duty taking into account 18 percent expected growth in dutiable imports during 2012-13. On the other hand, the value of dutiable imports went into negative for few months and it stood at 3.4 percent upto March 2013. The question arise that how the customs authorities amassed 111 percent growth in collection despite nominal dutiable imports during this period? The Board has been able to the improve collection through better management, monitoring and effectively checking leakage of revenue. Moreover, the misuse of the SROs has been effectively controlled at the import stage. The FBR has been able to improve valuation of goods with better classification at the import stage. The customs authorities have also focused on the DTRE scheme and mis-declarations at the import stage.
Sources said that the strengthening of controls and accountability within customs department are other reasons for improved collection during the said period. According to sources, the FBR has ensured improvement in valuation of the imported goods. The customs duty is levied on ad valorem basis which means that it is directly proportional to the value of imported goods. If the value is under-declared, lower duty will be collected. Under the prevailing law (section 25 of Customs Act, 1969) transactional value is to be accepted as also mandated by the GATT Agreement on Valuation. Under these provisions it is very difficult for the customs authorities to discard the mis-declared/ under-declared import value by unscrupulous elements. Despite the above, all available resources including similar/identical goods values, backgrounds inquiries, online verifications and confirmation from countries of origin, are used to check the authenticity of the declared values. These efforts have resulted in huge improvement in duty collection through higher assessed values as against declared value.
In addition to mis-declaration of value, other types of attempts are made by the unscrupulous elements to avoid correct payment of duty and taxes at import stage. These include mis-declaration of origin (to claim benefit of FTAs/PTAs), mis-declaration of classification (to benefit from a lower rate of duty), mis-declaration of quantity/description etc. Vigilant scrutiny by assessing officers and effective monitoring by supervising officers resulted in controlling such attempts and thereby saving government revenue, sources maintained.
Sources said that the imported goods confiscated by Customs authorities on account of violations of different import related laws and procedures, are auctioned after completion of legal procedures, including appeals etc. Expeditious and efficient disposal of these cases result in higher auction proceeds which include government revenues.
The imports under certain concessionary regimes require the importers to submit some form of security (bank guarantee, post dated cheque, indemnity bond etc) to secure the involved government revenue. In case the conditions of the concession are not fulfilled by the importer within the specified time limits, the relevant security is en-cashed. In some other cases where imported goods are provisionally cleared on account of some verification/confirmation of value, classification, origin etc, the securities are en-cashed when the issue is decided/found against the contention of the importer, sources added.