Incomplete declarations, avoiding customs valuation rulings: Importers of cosmetics, toiletries causing revenue loss to exchequer

Some importers are causing revenue loss to the national exchequer by making incomplete declarations, avoiding application of 4 new customs valuation rulings to import expensive/branded cosmetics and toiletries in the garb of low quality products.
Sources told Business Recorder here on Tuesday that the Federal Board of Revenue (FBR) has directed Collectors of Customs to intercept suspected consignments of cosmetics and toiletries, where importers try to by-pass the new customs valuation rulings to evade taxes at the import stage.
It is learnt that certain importers are violating valuation ruling No 588/2013, 589/2013, 590/2013 and 596/2013 issued for accurate assessment of customs duty on the import of toiletries, perfumes and deodorants. The FBR has further directed the Collectors of Customs to exercise due vigilance at both assessment and examination level to control import of expensive/branded cosmetics and toiletries under the cover of low quality items.
The investigation carried out by the Directorate General of Customs Valuation Karachi revealed that valuation of toiletries was hitherto governed by Valuation Ruling 512/2012 dated 27.12.2012 that notified values of Unbranded Toiletries. For Branded Toiletries, no uniform practice was followed by the clearance Collectorates while assessing them to duty/taxes. For valuation of all types of Perfumes/Deodorants, Valuation Ruling No 513/2012 dated 27.12.2012 is applied.
The Directorate General of Customs Valuation has conducted the exercise of determining/revising the Customs values of Toiletries and Perfumes/Deodorants including high end branded Toiletries/Perfumes/Deodorants and unknown & inexpensive brands. After detailed consultations with stakeholders including President and other representatives of KCCI and FPCCI, four Rulings have been issued: 589/2013 governs only the high-end branded Toiletries whereas 596/2013 applies only to low end and inexpensive brands; rest of Toiletries falls within the ambit of 590/2013. Valuation of perfumes and deodorants is governed by Valuation Ruling No 588/2013 read with its Corrigendum dated 24.10.2013. In the said four Rulings, brand-wise determination of Customs values has been done to differentiate between high end known brands from low end unknown brands. The Customs values reflect their market values.
Perusal of import data and feedback by stakeholders reveals that certain unscrupulous importers of subject goods evade Government revenue by making incomplete declarations avoiding application of valuation rulings and by importing expensive/branded goods in the garb of low-end Cosmetics & Toiletries. To circumvent any effort at import stage to manipulate description and to clear cosmetics/toiletries/perfumes of high end/ known brands at lower values, clearance Collectorates are immediately required to exercise due vigilance at both assessment and examination level.