Determining value of goods: Customs ignoring criteria of ‘country of origin'

LAHORE: The customs authorities are accused of contravening the criterion of the 'country of origin' in determining the value of goods, claimed sources from the clearing agents’ community.

Generally, they said, the problem arises when the Appraising Intelligence Bureau objects at the time of clearance, alleging gross under-valuation of the already assessed items for duty and taxes against the imported goods.

The objection is raised when compared with the goods imported from other than the country of origin at a higher rate. Meanwhile, the department discharges the liability of the clearing agents and the importer is supposed to contest his case single-handedly at the relevant forums.

They said the customs authorities consider the price of goods provided by other exporters to treat the declared version of another importer as misdeclaration.

According to the sources, the customs officials prefer the prices of imported items from one country to those from another, which is more than justifiable.

The authorities allege misdeclaration based upon the premise that the part number of certain imported items differs from the confiscated goods even though the part numbers of items declared in the invoice are the same as which have been imported.

In some cases, they said, the department does not have any price data of the country of origin. It reassesses the imported items with the price data of another country to invoke penalties and additional duties and taxes against the importers.

This confusion arises when countries fall under the same economic zone, and parts made therein are more or less considered of the same quality. Therefore, chances of under-invoicing cannot be ruled out in such circumstances, said the departmental sources.

However, sources from among the importers and clearing agents believe that the law does not entertain the concept of economic zone and goods are supposed to be compared with identical goods from the same source of export only instead of some other country situated in its neighborhood.

Instead, they said, the concept of economic zones has been eliminated in the post-General Agreement Tariffs and Trade (GATT) scenario, and the valuation is required to be based on the actual value of imported merchandise for duty assessment purposes.

In no case, they said, should it not be hinged on the value of merchandise of any other country of origin. The customs officials misuse the law arbitrarily to ascertain fictitious values; they stressed and added that the importers are accused of deliberate misdeclaration without adducing any evidence to substantiate a willful default.

Ironically, they said, the customs authorities impose penalties against the imported goods on mere hypothecation while comparing the country of origin with the country of import.

Copyright Business Recorder, 2023