Pakistan customs has raised the Import Trade Price (ITP)/values of three major flat steel products up to $48 per ton. Sources told Business Recorder on Monday that the Directorate General of Customs Valuation has increased import values of Hot Rolled Coils (HRC) Cold Rolled Coils (CRC) and Galvanised Products (GP) and after the issuance of new ITP for three steel products, the evaluation of taxation would be on the new values, which will make steel products more costly in the domestic market.
A formal notification to this effect has been issued by the Directorate to the importers, all concerned departments, customs collector appraisement, Model Customs Collectorate (MCC) and others at all sea and dry ports As per the notification, with an increase of $48 per ton, valuation of HRC will be $578 per ton for the imposition of tax. Similarly, ITP of CRC and GP sheet has surged by $43 per ton and $34 per ton to $591 per ton and $624 per ton, respectively.
Earlier, valuation ruling in terms of section 25-A of the Customs Act 1969 determining the value of HRC, CRC, and GP sheets (secondary quality) was issued on June 11, 2010 and since then prices of these goods have registered an upward trend in the international market. The earlier valuation ruling was taken up for revision so that increase in prices could be captured in the fresh valuation ruling.
In order to proceed with the fresh determination of values, the Directorate held a meeting with all stakeholders including local manufacturers on April 18, 2011 and April 20, 2011. During the meting, the importers associations insisted that average value of six months, as published in LMB, may be taken into account instead of prescribed 90 days for the new valuation of three flat steel products.
Moreover, they insisted that discount percentage allowed for secondary quality goods be enhanced to the levels adopted in all valuation rulings issued prior to June 11, 2010. Whereas, the local manufacturers contended that the local selling price of GP prime and secondary quality indicated a difference of price nearly 10 percent. They also stressed that the difference between price and secondary products was not more than 2-5 percent in the local market.
Though, Pakistan Steel was duly invited to attend the meeting on the issue but no one from their side attended the scheduled meeting. Later, vide letter dated May 5, 2011, they submitted their point of view, in which they favoured adopting the earlier six-country average price method based on LMB price with the request that the discount percentage allowed for secondary quality should be reduced.
However, in view of the order of the Sindh High Court, it was not possible to adopt six-country price average formula. Finally, customs valuation keeping in view the court case as well as the recommendations filed by the imports and local manufacturers next methods ie deductive method as prescribed under section 25(7) of the Act, was applied and the market enquiry was conducted.
Based on the facts gathered during the market inquiry the new values have been determined in terms of section 25(7) of the Act. The new values are hereby determined under section 25-A of the Customs Act 1969 and all the customs collectorates have been advised to finalise the assessment on the value mentioned above. These values will remain valid till further revision. However, in case the invoice value is higher than the value determined in this ruling, such higher value will be adopted for assessment under section 25A of the Customs Act 1969.