The Directorate General of Customs Valuation Karachi has revised customs values on the import of different specifications of polyester spun yarn and viscose spun yarn for assessment of duties and taxes from China, Thailand, Indonesia, India and Vietnam origin.
According to the valuation ruling number 983 of 2016 issued here on Tuesday, customs values of various counts of polyester spun yarn, viscose spun yarn and their different blended yarn of China, Thailand, Indonesia, India and other origins (manufactured from polyester staple fibre and viscose staple fibre respectively) have been determined.
The ruling said that Chairman All Pakistan Textile Mills Association (APTMA) wrote to Director General Customs Valuation, stating that subject yarn items are being rampantly under-invoiced and consequently, financially damaging local manufacturers directly. In this context, APTMA requested the Directorate General of Customs Valuation Karachi to determine customs values of subject items as per prevailing international prices. All-Pakistan Textile Mills Association (APTMA) vide letter Number PO/chair-38/2016/0462 dated 25th of July 2016 also lodged a complaint regarding the aspect of under-invoicing in import of polyester and viscose spun yarn (HS-Code 5509.5100) before Chairman Federal Board of Revenue, Islamabad. This prompted the initiation of a detailed exercise for determination of value of said items under section 25A of the Customs Act, 1969.
The Director Valuation took up this matter and wrote to the President KCCI, APTMA and PYMA inviting stakeholders to provide input on valuation of subject goods. After analysing available information/ data, the Director, Directorate General on 25th August 2016 held first meeting in this context. Initial deliberations took place and it was decided that both APTMA and PYMA shall submit agreed formulas/proposals to derive at subject values, the same were to be securitised by this Directorate. Thereafter, every single aspect of the polyester/viscose chain was thrashed out starting from raw-material prices up to the subject and products. Representatives of Pakistan Yarn Merchant Association (PYMA) and representatives of All Pakistan Textile Mills Association (APTMA) and their technical teams duly assisted the Directorate General and put forth in detail, their respective points of view regarding the conversion costs and the import value of subject items.
It is pertinent to mention here that both PYMA and the APTMA are reputable trade associations and it is a fact that both have conflicting interests with regard to import value of subject items, therefore, it was decided that contentions of each of the associations shall be accorded due weightage. All aspects were thrashed out and their conflicting views were heard (concerning the polyester and viscose chain items, starting from raw material and going up to the finished form of subject goods), by the Directorate General.
There had no valuation ruling in field for polyester and viscose spun yarn, therefore, care was exercised to derive at assessable values of various counts and blends of subject goods. After many stages of deliberations, four contentious issues were identified for further elaborations. These issues are determination of raw material values (ie polyester staple fibre and viscose staple fibre), conversion cost to convert staple fiber (of polyester and viscose) into spun yarns, of different counts that are being imported, conversion cost to convert staple fibre (of polyester and viscose) into blended yarns, of different counts that are being imported and conversion cost of converting staple fibre (of polyester and viscose) into double or multiple yarns of different counts that are being imported, ruling said.
Despite the fact that both parties had strong views regarding their own contentions in terms of import values of subject goods, however, finally vide separate letters from PYMA and from APTMA (jointly signed by both parties), both (APTMA and PYMA) mutually agreed on a manner I formulae for determining prices of different types of the Spun yarn counts, their various blends and of double or multiple yarn, under Chapter 55 keeping in view the ring spinning machines, rotor spinning machines and vortex/jet spinning machines (MJS or MVS) and their conversion rates / costs.
After detailed discussion the valuation method stipulated vide Section 25 of the Custom Act, 1969 was applied to arrive at fair value of subject spun yarn types and categories. Transaction value method provided in section 25 (1) was found inapplicable because requisite information was not available as per law. Identical/similar goods value methods provided in See 25(5) and (6) were sequentially examined for applicability to valuation issue in instant case, the same provided some important reference values but they could not be exclusively and solely relied upon. Thereafter, market inquiry as envisaged under Section 25(7) of the Customs Act, 1969, was conducted. The prices of different types, counts etc of Spun Yarn in open market varied significantly and were heavily depended on quality of the Yarn and location of the selling Point or shops throughout the country. Hence, this tool for determining value could not be solely relied upon. Furthermore, online value was also checked. The computed value method as provided in Section 25 (8) of the custom Act, 1969 could not be applied solely either as conversion cost from constituent material at country of export were provided by industry experts and not by the manufacturing factories in China themselves. All information gathered above was utilized, evaluated and analyzed for purpose of determination of customs values. Consequently, customs values of spun yarn of polyester, viscose and their blends of different specification have been determined under section 25 (9) of the Customs Act 1969, directorate said.
In cases where declared/transaction values are higher than the Customs values determined in this Ruling, the assessing officers shall apply those values in terms of Sub Section (1) of Section 25 of the Customs Act, 1969. In case of consignments imported by air, the assessing officer shall take into account the differential between air freight and sea freight while applying the Customs values determined in this Ruling. Clearance Collectorates are requested to be vigilant during assessment and examination, with special emphasis on count, description and specification of yarn imported, directorate added.
The values determined vide this ruling shall be the applicable customs value for assessment of subject imported goods until and unless it is rescinded or revised by the competent authority in terms of Section 25-A of the Customs Act, 1969. In case imported spun yarn does not specifically fall under any of the above descriptions and its value is not determinable, the same may be referred to the Directorate General for necessary action at this end.