According to a report in the Business Recorder the other day, the Central Board of Revenue has compiled a comprehensive list of imported goods with indicative price of each item in the international market with a view to recovering custom duty on its basis.
This would be seen as a step towards the goal of reforms in the procedure of customs appraisal and assessment of dutiable imports.
It has been pointed out that all importers, in commercial and industrial categories, showing willingness to pay custom duty on the basis of the indicative price, will be allowed the clearance of their goods through the green channel.
They will not face delays in the clearance of their goods on account of duty assessment, which also involves opening of containers for the examination of imported goods.
The scheme aimed at calculating the custom duty on the basis of indicative prices is reported to have been finalised by the CBR in consultation with the representatives of the Chambers of Commerce and Industry and other trade bodies.
In this context, opposition to the above proposal is not expected to arise from the importers and traders at large and therefore the adoption of the scheme by the CBR is not likely to prove to be a problem.
The system is planned to be introduced through the forthcoming budget.
The favourable results of the new procedure for the assessment of custom duty on imported goods, as pointed out in the official report, would include uniformity of duty assessment on each imported item throughout the 13 and odd customs check posts in the country.
At the same time, attempts at under-invoicing of similar imported goods will also be checked to a great extent.
Additionally, the uniformity in the landed cost of each item of industrial raw material, in terms of duty based on indicative prices, it may be assumed, would contribute to near uniformity in the cost of production in local industries.
However, the industrial units located in distant areas of the country may incur additional cost on account of freight and other incidentals.
The most important benefit of the scheme will be the speedy clearance of imported goods without any long delays which are usually caused by disputes between the importers and the customs on the issue of the unit prices.
Such disputes are expected to be completely eliminated. As a result, the local industries would be saved from bearing the burden of additional cost on account of delays in the production programmes.
It is however not clear as to whether the scheme is to be introduced as a blanket measure to replace the existing customs appraisal which is based on invoice prices of imported goods or it will be made an optional procedure for importers to choose.
In case the importers are given the option to pay custom duty on the basis of the actual import price rather than the indicative price, the possibility of a vast difference in prices of similar imported items cannot be ruled out.
An importer may present documentary proof that the imported price of his goods was much lower than the prescribed indicative price and therefore he should pay a much lower amount of custom duty and sales tax.
This sort of anomaly is likely to confront the customs authorities in case the adoption of the above scheme is allowed to be a choice of the importer. If the scheme is not enforced decisively without giving an option to the importers, the importers may even be encouraged to resort to imports at dumping prices in collusion with foreign suppliers/exporters.
However, permission to use green channel on the basis of indicative prices of imported goods, may also in the long run lead to misuse of this facility by the unscrupulous importers who may show different items in their invoices and not the actual imports because containers will not be opened by the customs authorities.
The revision in the indicative prices of a large number of imported items is also likely to turn out to be a recurring exercise for the CBR due to the fact that prices fluctuate every now and then for one reason or the other in different countries.
At the same time, prices of similar items show considerable differences from country to country, in the face of which the importers may frequently dispute the fixed indicative prices.
The customs would then have to change the indicative prices of items quite frequently.
This difficulty would have to be taken into account before finalising the scheme of indicative prices.
Comments
Comments are closed.