Small gift parcels: FTO asks FBR to formulate proper rules

05 Jul, 2022

ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to adopt a more facilitative approach and rationalise the duties/ taxes exemption threshold for small gifts parcels sent by the overseas Pakistanis.

The tax ombudsman has disposed of a complaint relating to the clearance of a small gift parcel by an overseas Pakistani and has directed the FBR to formulate proper rules for such small gifts parcels.

Briefly, the case was related to a small gift sent to the complainant by a cousin residing abroad and expected a compassionate treatment by the FBR.

The complainant requested to exempt the goods from payment of duty and taxes that are quite high or return the goods back to the sender abroad.

The complainant was referred to the secretary Revenue Division for comments. In response, the Collectorate of Customs, Islamabad informed the FTO that the complainant was requested to file Goods Declaration (GD) to examine his request for clearance of goods on payment of duty and taxes. It was further averred that the subject consignment cannot be exported back to the country of origin in view of the fact that Section 138 of the Customs Act, 1969 only allows re-export of frustrated cargo that has been brought into the country by way of inadvertence, misdirection or untraceability of the consignee, which is not the case in present complaint.

While concluding the proceedings, FTO has observed that the case under discussion is related to a small gift sent to the complainant by a cousin residing abroad and, accordingly, deserves a different and more compassionate treatment by FBR as these small gifts, by no means, can be termed as commercial import. Reportedly, a large number of similar consignments are stuck at various Customs stations across the country. There is a French proverb: “small gifts maintain friendship, big ones maintain love”. Therefore, FBR needs to facilitate, at least, the agents and means of friendship, especially, in the case of overseas Pakistanis and their close relatives residing in the country.

Accordingly, Tax Ombudsman has recommended the FBR to direct the Collector, Collectorate of Customs, Islamabad to re-examine the case of complainant compassionately keeping in view the nature of goods being a small value gift on one hand and significant emotional value, associated with the goods under reference, on the other hand, and decide the matter within 15 days.

The FTO has also directed FBR to develop a more facilitative approach towards such small value gift transactions and device proper rules in this regard with more rational and facilitative duties and taxes exemption threshold, duly taking into account the current inflation trends and prevalent currency exchange rates.

Copyright Business Recorder, 2022

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