Valuation, assessment: FTO directs DGCV to accurately classify imported cellphones

ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Directorate General Customs Valuation (DGCV) Karachi to accurately classify the imported mobile phones based on their appropriate customs tariff codes. In this regard, the FTO office has issued an order on Thursday.

According to the FTO order, the FBR direct concerned Collectorates of Customs and Directorate General Valuation to promptly address concerns under reference and rectify the flaws in the valuation and assessment of the mobile phones.

The FBR should also ensure to apply consistent and uniform valuation methods, giving due consideration to the declared value unless there is a clear evidence of mis-declaration.

17pc tax applicable on mobile phones valuing above $200

The appropriate depreciated value of used mobile phones based on physical condition and model should be applied in order to prevent unwarranted overcharging, the FTO directed.

The complaint was filed against the Directorate General Customs Valuation Karachi on account of wrong updation and incorrect computation of duties and taxes of mobile phones with respect to their worth.

Directorate General Customs Valuation issued valuation ruling 1732/2023 after providing opportunity of hearing to all stakeholders and after recommending depreciation up to a maximum of 60 percent.

The FTO order stated that the customs authorities frequently employ improper methods when assessing duty and taxes on mobile phones, leading to misclassification of these devices and the imposition of higher duty rates. This significantly amplifies the financial burden on importers. Moreover, there seems to be an absence of consistency and uniformity in the valuation methods employed by customs officials.

Often the declared value of mobile phones is disregarded without providing a reasonable justification for such actions. This inconsistency not only violates fairness principles but also erodes the trust that should exist between importers and customs authorities.

Additionally, the customs authorities frequently overlook the diminished value of used mobile phones when assessing duty and taxes, the FTO added.

Copyright Business Recorder, 2023