Manufacturing of toiletry products: DGCV Karachi revises upward values of raw materials

ISLAMABAD: The Directorate General of Customs Valuation Karachi has revised upward customs values of raw materials used in the manufacturing of toiletry products including soaps, detergents and shampoos.

According to the valuation ruling 1521 of 2021 issued by the Directorate General of Customs Valuation Karachi on Tuesday, the customs values have been enhanced on the import of Palm Fatty Acid Distillate (PFAD), Palm Acid Oil (PAO), Mixture of Fatty Acids (MoFA), Residue of Fatty Substances (RoFS), Soap & Gum Stock / Sludge of Soap Stock / Pitch Oil / Alkaline Residue & Inedible Animal or vegetable oils & fats. The new Valuation Ruling has superseded the Valuation Rulings numbers i.e. 1347/2018; 1346/2018 and 336/2011.

Earlier, the customs values of Palm Acid Oil, Mixture of Fatty Acids (MoFA) & Residue of Fatty Substances (RoFS), PCTs 3823.1920, 3823.1990, 1522.0010 were determined under section 25A of the Customs Act, 1969 vide Valuation Rulings. Representations were received from several stakeholders including M/s Pakistan Soap Manufacturers Association (PSMA) as. well as Pakistan Edible Oil Refinery’s Association that the international prices of the said goods are showing an upward trend in international market and the Rulings be revised accordingly. Therefore, this Directorate General initiated an exercise for determination of Customs Values of the subject goods in terms of Section 25-A of the Customs Act, 1969.

The meeting was attended by different stakeholders including the representatives from Pakistan Soap Manufacturers Association (PSMA) and Pakistan Edible Oil Refiners Association (PEORA). The participants were requested to submit following documents to determine the customs values: (i) Invoices of imports during last three months showing customs value; (II) websites, names and E-mail addresses of known foreign manufacturers of the item in question through which the actual current value can be ascertained; (iii) copies of Contracts made / LCs opened during the last three months showing the value of item in question; (IV); the copies of sales tax Invoices issued during the last four months showing the difference in price (excluding duty and taxes) to substantiate their contentions.

The ruling said that the stakeholders intimated that the values of Palm Fatty Acid Distillate (PFAD) are published in the Reuter’s which is an accredited publication and should be linked with it. A unanimous proposal was also put forward that the value of Reuter’s for said product be made basis of Valuation of remaining products/by products keeping in view international price trends, constituent materials and other aspects. Detailed deliberations were held and finally, unanimous formulas regarding valuation on the basis of Reuter’s price for (PFAD) was agreed to arrive at values of other products.

The ruling said that the valuation methods provided in the Customs Act, 1969, were duly applied in their regular sequential order to arrive at oms values of subject goods. The transaction value method as provided in Sub-Section (1) of section 25 of the Customs Act, 1969, was found inapplicable because requisite information was not available as per law. The wide variation of values displayed in the import data as available on record also strengthened the aforementioned fact. Hence requisite information under law was not available to arrive at the transaction value. Therefore, identical / similar goods value methods as provided in Sub-Sections (5) & (6) of Section 25 ibid were examined for applicability to the valuation issue in the instant case. The same provided some reference values but could not be exclusively and solely relied upon. In line with the statutory sequential order of Section 25, this office conducted market inquiries under sub-Section (7) of section 25 of the Customs Act, 1969, however, this method of valuation could not be exclusively relied upon, it added.

Copyright Business Recorder, 2021