LAHORE: In a stunning reversal, the customs valuation department has effectively reduced the custom values of power tools imported into the country.
This decision has left many stakeholders reeling, particularly genuine importers who had been expecting a fair playing field.
The custom values had been recently determined after a lengthy exercise by the department to eliminate massive under-invoicing by unscrupulous traders. Valuation Ruling No. 1908, dated October 3, 2024, had been in effect for about two months, during which time significant revenue increases were reportedly witnessed.
Power tools: New customs values fixed
However, on December 3, 2024, the department issued a revision order (No. 64/2024) setting aside the earlier ruling and leaving the field open for under-invoicing. Sources close to the department revealed that another valuation ruling would be issued within three weeks, but historical patterns suggest that such rulings often take much longer to materialize.
Genuine importers, who had been affected by under-invoicing, have expressed concerns that they will continue to face unfair competition from revenue evaders. These importers are worried that the lack of a clear valuation ruling will embolden fraudsters, allowing them to have a field day.
Shockingly, it has come to light that the customs department is still assessing the values of sophisticated power tools based on their weight, rather than considering other significant factors such as design and innovation. Until a new valuation ruling is issued, power tools will continue to be valued and assessed for duties and taxes at a rate of $2 per kilogram, which is grossly under-invoiced.
The Directorate General of Customs Valuation Karachi had previously fixed new customs values for the import of 31 different types of power tools on October 3, 2024. The directorate had divided power tools into three categories for assessment of duties and taxes. However, the recent revision order has thrown the entire system into chaos, leaving genuine importers vulnerable to unfair competition.
Power tools are hand-held devices operated by power and used in manufacturing and construction industries.
Copyright Business Recorder, 2024
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