Karachi, November 4, 2023 – Federal Board of Revenue (FBR) has issued new customs values of tyres and tubes for determination of duty and taxes after massive fall of revenue under this head.
The move comes after an extensive analysis revealed a substantial drop in the import value of these products over the past two years.
The Directorate General of Customs Valuation Karachi, a subsidiary of the FBR, recently published the new customs values for over 100 different types of tyres and tubes, primarily for passenger cars originating from Japan and China. This development is part of an effort to align customs values with international market trends.
The new valuation ruling, designated as 1820 of 2023, aims to address the challenges posed by a significant decline in the import value of tyres and tubes. According to the analysis conducted by the directorate, the total import value of these products in Pakistan decreased from Rs 11 billion in 2020-21 to just Rs 3 billion in 2022-23. However, the total import value of tyres and tubes under transit trade from Afghanistan saw a stark increase, rising from Rs 2 billion to Rs 18 billion during the same period.
Previously, customs values for different types and sizes of tyres and tubes, including those for passenger cars, were determined under Section 25A of the Customs Act, 1969, through Valuation Ruling No. 1700/2022. However, stakeholders, including the Pakistan Tyre Importers and Dealers Association (PTIDA), requested a fresh determination of customs values to better reflect international market conditions.
The directorate conducted a meeting with relevant stakeholders, including PTIDA, to consider their proposals for the valuation of the subject goods. PTIDA highlighted the downward price trend in the international market and submitted their proposed prices accordingly. The directorate also scrutinized 90 days’ worth of data and compared the import data of tyres and tubes over the past three financial years with data from Afghan Transit Trade.
In addition, a representation was received regarding the inclusion of Vietnam Origin in the Valuation Ruling. The applicant presented Customs Appellate Tribunal Bench-H, Karachi Orders in Customs Appeal Nos 781 & 783/2023, dated 22.08.2023, in which Valuation Rulings Nos 1700/2022 and 1701/2022 were set aside for the appellants. However, the ruling indicated that the applicant’s request regarding Vietnam origin did not merit consideration, considering the lower declared values.
To determine the new customs values, the directorate visited various wholesale and retail markets to observe the actual prices of tyres and tubes. After collecting data and conducting an exhaustive exercise, the values of tyres and tubes have been revised.
The new customs values of tyres and tubes for passenger cars will be assessed based on the attached list (Annexure-A) forming an integral part of the Valuation Ruling. Additionally, the ruling specifies that if a radial tyre is imported and is not covered by this Ruling but shares specifications similar to normal tyres, except for being radial, it may be assessed at 12% higher value than that of the normal tyre.
These changes are expected to have a significant impact on the importation of tyres and tubes, ensuring that the valuation process aligns more closely with international market trends and reflects the actual values of these products, thereby helping to maintain revenue stability. Stakeholders, importers, and industry players are encouraged to stay informed about these revised customs values to ensure compliance with the updated regulations.
