KARACHI: In order to prevent under-invoicing and mis-declaration the customs authorities have powers to accept offer from any person to allow clearance at higher value than the declared by an importer for the same consignment.

The Customs Act, 1969 has authorized the customs officials to allow such offer under Section 25C of the Act to takeover the imported goods.

Section 25: Power to takeover the imported goods

Sub-Section (1): If any person makes an offer in writing to buy the imported goods sought to be cleared at value declared by an importer in the goods declaration, and the Collector of Customs is satisfied that the declared value is not the actual transactional value, he may after approval of the Board order the following without prejudice to any other action against the importer or his authorized agent, namely:-

(i) entertain offer by any other person to buy these goods at substantially higher value than the declared customs value in the goods declaration and payment of customs duties and other leviable taxes thereon, provided such offer is accompanied by a pay order equal to twenty-five per cent of the amount of each such offer and duties and other taxes calculated in accordance with the offer;

(ii) give an option in writing to the importer of such goods for clearance of imported goods at the customs value equal to such highest offer for purchase of goods and payment of customs duties and other taxes chargeable thereon; and

(iii) in case the importer fails to clear the imported goods within seven days of the receipt of notice under clause (ii) above, the appropriate officer may takeover the goods on payment of customs value declared in the goods declaration and an amount equal to five per cent of such declared value;

Sub-Section (2): The imported goods taken over under sub-section (1) shall be delivered to the offerer on submission of two pay orders, one equal to the customs value declared in the goods declaration plus five per cent in the name of importer and the other pay order equal to the remaining amount of value of imported goods and the amount of customs duties and other taxes leviable on the imported goods in the name of Collector of Customs;

Sub-Section (3): In case the local buyer fails to take the delivery of the goods on payment of value and taxes as prescribed in sub-section (2) above, the pay order equal to twenty-five per cent of the amount shall be fore-feited in favour of the Federal Government and imported goods shall be released to the importer as per customs value determined under sections 25 or 25A as the case may be.

The Federal Board of Revenue (FBR) has recently issued updates to the Customs Act, 1969, incorporating changes introduced through the Finance Act, 2019. The amendments primarily focus on the determination of customs values for the collection of duties and taxes on imports or exports of goods under Section 25 of the Customs Act.