Steel importers have refused to accept the revised Import Trade Price (ITP) fixed by customs for import of secondary flat rolled steel products, and have demanded release of imported consignments at provisional assessment till the issue is resolved, sources in customs said.
Recently, customs valuation department has revised the ITP of secondary flat rolled steel products, including cold rolled coiled (cr), hot rolled coiled (hr) and galvanised products (GP) in downward side. However, the ITP of these steel products are still higher than the prime quality steel products due to the reason that customs have included South America transactions, which are not being reported in London Metal Exchange (LME) for past nine months.
Sources said that importers were also not taken into confidence before issuing new values. Even the matter was never discussed with them, while in the past the new values were notified after discussion and consultation with importers and representative associations.
They said that as per the instructions of FBR, prices of prime flat rolled iron & steel products reported in LME during last 60 days were to be taken after the discount of 35 percent for HR and 38 percent for GP & CR for determining the values of Secondary Steel Products.
However, in the recent case the instructions of FBR have been violated by the concerned customs valuation officials, reasons best known to them for determining the values. In addition, the prices of South America have been included from where as per the LME no transactions have been reported for last six months and not a single ton has been imported, resulting in the unrealistic ITP of secondary flat rolled steel products.
Therefore, steel importers are not satisfied with new ITP and say that revised valuation advice would open new doors of corruption and the whole beneficiaries would be officers of customs appraisement, sources said.
On March 13, 2009, on the importers demand, Customs Valuation department had announce to reduce the ITP of secondary flat rolled steel products by 24-30 percent due to the declining price trend in the world market. However, the reduction in the ITP of secondary products is not in line with international market and the revised ITP is still some 90-200 dollars per ton higher than the actual pricee of secondary steel products.
"The new ITP of secondary flat rolled steel products is about 50-200 dollars per ton higher than the actual values of secondary flat products", importers said. Customs has fixed ITP 439 dollars per ton for HR against the actual price of 350 dollars in world market. Revised ITP of CR stood at 494 dollars over the actual value of 375 dollars per ton.
Customs has announced 583 dollars per ton ITP for GP, which is also 183 dollars higher than the actual value of GP, as at present GP price stood at 400 dollars per ton in international market, importers said. "We believe this step of customs would encourage misdeclaration, beside millions of rupee losses to the national exchequer," they added.
Therefore, steel importers have refused to accept the new ITP for the secondary flat rolled steel products and have submitted an appeal for revision and fixation of minimum assessable agreed values of flat rolled iron & steel products of secondary quality.
Obtaining statistics from LME, in the appeal importers have enclosed a chart, which gives the true picture of the prices in the international market. Importers have requested customs to take complete detailed information from the appraisement regarding the assessment of prime material been done by them which will give the true picture. In addition, the importers have demanded the release of imported steel consignments on provisional assessment under section 81 of Customs Act to save the importers from huge losses on account of demurrages.