Pakistan Customs, turning down importers plea, has clearly refused to cut the import trade price (ITP) of secondary flat rolled steel products, customs sources told Business Recorder on Monday. In a detailed order on the importers plea for reduction in the ITP of secondary flat rolled steel products, the customs has also rejected Pakistan Iron and Steel Merchants Association (PISMA) allegation that ITP ware issued without consultation with them.
On March 13, 2009, revising the ITP of secondary steel products, customs valuation reduced ITP by 24-30 percent due to the declining price trend in the world market. However, the new ITP of secondary flat rolled steel products was unrealistic and about 50-200 dollars per tonne higher than actual value of secondary flat products, sources said.
Therefore, the PISMA submitted an appeal for revision and reduction in the ITP of secondary steel products, claiming that price of secondary steel products in world market was less than ITP fixed by customs and that they had not been taken in confidence before issuing new ITPs. The steel importers for support of their statement also presented several documents to the customs officials, sources said.
However, Amir Khan Marwat, Director General (DG) customs valuation issued detailed verdict over the appeal on March 25, in which he rejected the PISMAs allegation and announced no change in the ITP of secondary flat rolled steel products.
"The first plea of the association (PISMA) that their members were not consulted while issuing Valuation Advice dated March 13, 2009 is negated by facts on record," customs order said.
Association requested for revision of earlier advice dated August 18, 2008, several meetings were held thereafter with the stakeholders which were also attended by PISMA and senior management of Pakistan Steel Mills, it said. It added: "As per procedure in vogue, input of all stakeholders was taken into account before issuing another valuation advice on December 20, 2008, which was also not accepted by PISMA".
Therefore, under the direction of the Federal Board of Revenue, the valuation directorate held more meetings with the stakeholders. Feedback and consultation with all stakeholders including PISMA was a continuous process, which culminated in the shape of Valuation Advice dated March 13, 2009, the order said.
"The second plea of PISMA to exclude prices of South America as reported in the London Metal Bulletin (LMB), is also not supported by evidence available on record", DG customs valuation claimed in the order. He said that PISMA had accepted earlier two Valuation Advices in CY 2008, which were based on average price of six origins including South America.
Both these two acceptable advices were issued in consultation and agreement with PISMA and were implemented by the department in letter and spirit, DG added. The PISMA had pointed out that prices of June and July 2008 had been taken to arrive at assessable value which has made the same as unrealistic. But perusal of record reflected that working in the fresh Advice had been made keeping in view the longstanding and well-established practice, DG customs valuation said.
He said that Karachi Chamber of Commerce and Industry had not raised any dispute regarding the new values of secondary quality meaning thereby that the prices were acceptable to the chamber.
"The review application in itself suffers from infirmities and has been filed without any reference to the relevant section 25-D of customs act 1969", Marwat added. The applicant has not submitted any import documents like goods declaration, invoice, packing list and LC to substantiate his request with tangible evidence.
Therefore, no legal procedural impropriety is found in the valuation advice dated March 13, 2009 and the same is hereby upheld, while the association review application, having nor merit is rejected. Commenting on the decision, the PISMA said that "its clearly one-sided decision", which would directly hurt the import trade of steel in a result of misdeclaration, as the ITP of secondary flat rolled steel products is higher than the prime.
The PISMA claimed that during the meeting, several customs officials had accepted the mistakably South America price has added for the ITP calculation and the new ITPs are not in line with international price.
At present, the price of secondary HR stood at 350 dollars per ton, CR at 375 dollars per ton and GP some 400 dollars per ton in the world market and importers want ITP in line with these prices, PISMA said. However, the customs valuation did not accept the facts. PISMA said that unrealistic fixing of the ITP values of steel flat product for duty purposes would cause billions of rupee loss to the to the national exchequer.
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