In a bid to enhance transparency and provide clarity in customs matters, the Federal Board of Revenue (FBR) has notified the rules for issuing advance rulings.
The finalization of these rules, outlined in SRO 1213(I)/2020 dated November 11, 2020, marks a significant step towards streamlining customs decisions and providing stakeholders with a structured mechanism for seeking clarity on specific cases.
Earlier, the FBR had issued SRO 965(I)/2020 dated October 05, 2020, introducing draft rules for advance ruling. The latest notification confirms the rules and procedures that will govern the issuance of advance rulings in various types of cases related to customs matters.
According to the finalized rules, advance rulings will be issued in the following cases:
(a) Classification of Goods:
• The classification of goods under the first schedule to the Customs Act, 1969.
(b) Determination of Origin:
• The determination of the origin of goods based on the rules of origin notified for bilateral and multilateral agreements.
(c) Applicability of Notifications:
• The applicability of notifications issued in respect of duties under the Customs Act, 1969, or any tax or duty chargeable under any law currently in force, similar to the manner of duty of customs leviable under the Customs Act.
To seek an advance ruling, an applicant can submit an application to the Secretary of the Advance Ruling Committee, clearly stating the question for which the advance ruling is sought. The applicant is required to submit an undertaking confirming that, to the best of their knowledge, no issues related to the goods in question are pending before any customs office, port of entry, or any adjudicating authority, tribunal, or court.
The advance ruling committee, responsible for processing the applications, may direct the applicant to appear in person or through an authorized representative to present their viewpoint and address any queries raised by the committee. The committee is obligated to pass an order within ninety days from the receipt of the application along with all requisite documents.
These rules are designed to provide businesses and individuals involved in customs-related matters with a transparent and efficient mechanism for obtaining advance rulings. The initiative is expected to reduce ambiguity, ensure consistency in customs decisions, and contribute to a more predictable and business-friendly customs environment.
The introduction of advance ruling rules aligns with the broader government agenda to facilitate ease of doing business, improve regulatory compliance, and attract investments. By providing a structured process for seeking clarity on customs matters, the FBR aims to enhance the overall business environment and foster greater confidence among stakeholders engaged in international trade and customs transactions.
