The Federal Board of Revenue (FBR) has decided to introduce a major change in the Web-Based One Customs (WEBOC) by incorporating valuation module in the system to link it with the Directorate General of Customs Valuation Karachi for clearance of imported goods under the "Green", "Yellow" and "Red" channels.
Sources told Business Recorder here on Sunday that one of the major changes in the WEBOC clearance system is to ensure proper checking of imported goods as per "Green", "Yellow" and "Red" channels. The system would ensure that each item should be properly processed through the "Green", "Yellow" or "Red" channels, whichever is admissible. The system of "Green", "Yellow" or "Red" channels could only operate effectively after incorporation of the Valuation Module in the system.
A new valuation module would be developed to apply valuation rulings in the WEBOC for detection of any mis-declarations or under-valuation on the imported consignments. The presence of the valuation module is necessary in the WEBOC for implementation of the Customs Risk Management System (CRMS). In the presence of the Valuation Module, the actual value of a specific item can be cross-matched with the customs valuation ruling of that particular item/brand/origin/description etc. This would help the customs officials to apply customs value on the import of any item for accurate assessment of duties/taxes.
According to the FBR instructions issued to Chief Executive Pakistan Revenue Automation Limited (PRAL) Tanvir Ahmad (Co-ordinator, RMS Development Team) has highlighted certain missing features in WeBOC such as the absence of a complete and comprehensive valuation module which is affecting the performance of WeBOC. Board concurs with the suggestions/recommendations of Tanvir as highlighted in the analysis/research of the said system: Firstly, Development of a complete & comprehensive valuation module linked with the risk management system (RMS). Secondly, cross matching of value of a particular item with valuation ruling. Thirdly, defining Pakistan Customs Tariff (PCT) codes on 12 digits for effective valuation of goods. Fourthly, connectivity of the WeBOC with the Directorate General of Valuation.
The FBR said that the Project Director of WeBOC and his team along with CEO PRAL and WEBOC development team to take urgent action for the development of the above referred functionalities in WEBOC so that the chances of revenue leakage due to incorrect valuation are curtailed.
According to the report of Tanvir, a senior customs official and Co-ordinator, RMS Development Team, the Director General Customs Valuation has advised the RMS Development team to ensure that for all green channel processing, customs Risk Management System may check the valuation rulings. The Additional Director also sent a list of customs rulings issued/by the valuation Directorate. The list of rulings was sent to RMS team of the PRAL. The rulings have been added in the CRMS to be checked for Green channel GD's but the RMS can not do so until a complete valuation module is available in the WeBOC software.
The present Customs Risks Management System (CRMS) relates to selection criteria and indicates risks of consignments under Green, Yellow and Red channels. During development of RMS and discussions held in the meeting with the Review and Overview Committees, following issues were identified by Tanvir with respect to implementation of valuation rulings: Present system shall not be able to compare values of a particular commodity on the basis of description (eg cereal foods of PCT 1905 or lubricating oil of PCTs 2710.1951, 2710.1952, 2710.1994) as spelling may differ or importer may declare deliberately different descriptions. Moreover, valuation rulings are, sometimes, based on brand or origin. The Valuation Module needs to be developed so that value of a particular item can be cross matched with valuation ruling of that particular item/brand/origin/ description etc.
Tanvir further highlighted that if comparison is based on PCT number, then one PCT heading may contain dozens of items and system shall throw every item in Yellow/Red channel, where declared value is less than the ruling value, whereas the requirement is to compare a particular item for which valuation ruling is issued.
Similarly, values taken from international magazines (SCAN, LMB etc) are available in PDF form (Image form) and cannot be used by WeBOC Software for "Green" channel processing.
The PRAL vide its letter No.1-DA(C)/PRAL/2011 dated 29-09-2011 wrote that the existing valuation rulings are not structured for an automated environment and there is a need for aligning valuation rulings on the pattern of structured descriptions and a team may be constituted to define PCT codes on 12 digits so that each item is separately defined and valuation ruling can be implemented for the desired single item, Tanvir said.
In his report, Tanvir Ahmad pointed out that there is no valuation module in WEBOC to cater to the above requirements. For proper functioning of CRMS, a new valuation module is required to be developed in WEBOC software. The connectivity also needs to be established between WEBOC and the Directorate General of Valuation.
"In view of above, it is requested to kindly issue necessary directions to the concerned quarters for development of valuation module in WEBOC to cater to the requirements as mentioned above. It is proposed that a meeting of Overview Committee, Review committee, Development team of RMS, Project Director (We BOC), and Valuation Directorate may be called to resolve the issue," Tanvir Ahmad added.