ISLAMABAD: The Customs Classification Committee of the Federal Board of Revenue (FBR) has ruled that 11 percent customs duty would be applicable on the import of “4G MiFi modem and Mobile WiFi modem”.

The rate of duty on the import of “modems” has issued by Collectorate of Customs Appraisement (East) Karachi based on the findings of Customs Classification Committee.

The Classification Committee concludes that the “4G MiFi modem and Mobile WiFi modem” are correctly classifiable under Pakistan Customs Tariff (PCT) heading 8517.6220.

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The whole confusion has been created by wrong interpretation of Directorate of Post Clearance Audit (Central) Lahore which created serious problems for the importers due to illegal applicability of customs law on the import of “Mobile WiFi modem”.

Details of the issue revealed that the Directorate of Post Clearance Audit (central) Lahore, referred the matter of classification of “Wi-Fi/Mi-Fi devices” to Classification Committee for determination of appropriate classification as per Pakistan Customs Tariff.

Brief facts as reported by the referring Directorate are that the Directorate of Post Clearance Audit (Central) Lahore, scrutinized the clearance data of the years 2015-17 of imports made by various telecommunication companies from MCC (Preventive/Appraisement), Lahore which transpired that Wi-Fi/Mi-Fi modems were being mis-classified under PCT heading 8517.6220 instead of actual PCT Heading 8517.6940 being “subscriber end equipment”.

Resultantly, an audit observation was issued to the importer and later on a contravention report was forwarded to the Collector of Customs (Adjudication) Lahore in terms of Section 179 of the Customs Act 1969 read with SRO 886(1)/2012 dated 18.07.2012.

The Adjudicating Authority issued Show Cause Notice and passed the Order-in-Original No. 27/2018 in favor of the department.

The matter was taken up by the Customs Appellate Tribunal and the tribunal referred the case to the Customs Classification Committee.

After carefully considering the arguments presented by both the importer and the department, and thoroughly reviewing the relevant provisions of the Pakistan Customs Tariff (PCT) and the General Rules of Interpretation (GRIs), the Classification Committee observed that the appropriate classification of “4G MiFi modem and Mobile WiFi modem” is under PCT heading 8517.6220. This heading specifically addresses devices that are designed to perform the reception, conversion, and transmission or regeneration of data—functions that are central to the operation of the Wi-Fi/Mi-Fi modems in question.

Additionally, the Pakistan Telecommunication Authority (PTA), in its clarification, emphasized that the term “Subscriber end equipment” is broad and can apply to a wide range of end-user devices, regardless of their specific functionality. This broad categorization does not align with the precise and specific functions of the Wi-Fi/Mi-Fi modems, which are primarily involved in data processing and transmission.

This classification is further reinforced by the principles of GRIs 1 and 3(4, which stipulate that goods should be classified based on specific descriptions rather than more general ones. In this case, the function-based description under PCT heading 8517.6220 is more accurate and specific compared to the broader, less defined category of “subscriber end equipment.

Therefore, the classification Committee concludes that the “4G MiFi modem and Mobile WiFi modem” are correctly classifiable under PCT heading 8517.6220, customs classification committee added.

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