Karachi, February 26, 2025 – Pakistan Customs has issued a new valuation ruling for ceramic and porcelain tiles to determine the applicable duties and taxes on imported consignments.
The Directorate General of Customs (Valuation), Karachi, has formally released Valuation Ruling No. 1972 of 2025, which outlines the updated customs valuation for tiles imported from various regions, including China, the USA, Europe, and other international markets.
Background of the Valuation Update
Previously, the customs valuation for ceramic and porcelain tiles was determined under Valuation Ruling No. 1787/2023, issued on June 9, 2023, under Section 25-A of the Customs Act, 1969. However, this ruling was challenged and subsequently reviewed by the Director General of Customs Valuation under Section 25D. The case was remanded for reassessment, leading to a directive for the issuance of a fresh valuation ruling.
As a result, the Directorate General of Customs had to revisit and reconsider the valuation process. While conducting the reassessment, officials faced challenges as stakeholders repeatedly requested delays in providing critical documentation, including Letters of Credit, Bank Contracts, EIF Forms, and Export GDs. Several meetings were scheduled to facilitate discussions, with the final meetings held on December 13, 2024, and December 26, 2024. Despite multiple extensions granted to stakeholders, the required documents were not submitted on time. Consequently, a conclusive meeting was held on January 13, 2025, where stakeholders were given until February 10, 2025, to provide the missing records.
Stakeholder Perspectives on Tile Valuation
During deliberations, importers argued that global prices of tiles had decreased due to advancements in manufacturing technology. They further suggested that existing valuation categories should be merged to prevent misdeclaration of porcelain tiles. On the other hand, local manufacturers highlighted their substantial investments in domestic tile production, especially in the manufacturing of larger-sized tiles. They asserted that the market price of imported tiles remained significantly high and proposed a market inquiry to verify the price trends.
Customs Valuation Methodology and Application
To determine the customs values for tiles, the Directorate General of Customs applied valuation methods outlined in Section 25 of the Customs Act, 1969. The transaction value method was found unsuitable due to significant price variations in import data. The Directorate then examined identical and similar goods value methods under Sections 25(5) and 25(6), but due to inconsistencies in the data, these methods were also deemed inapplicable.
As per the statutory sequential process, a market survey was conducted under Section 25(7) of the Customs Act. This approach ultimately led to the final determination of the customs values for ceramic and porcelain tiles.
Implementation and Validity of the New Valuation Ruling
Under the newly issued valuation ruling, if declared values exceed the determined customs values, the higher declared values will be applied, in accordance with Section 25(1) of the Customs Act. Additionally, for air-freighted consignments, customs officers will consider the difference in freight costs between air and sea shipments.
The new valuation ruling will remain in effect unless rescinded or revised by the competent authority under Section 25A(4) of the Customs Act, 1969. Stakeholders dissatisfied with the ruling may file a revision petition within 30 days before the Director General, Directorate General of Customs Valuation, Custom House, Karachi.
This latest development in customs valuation for ceramic and porcelain tiles is expected to bring more clarity and fairness to import duties, ensuring a balanced approach for both importers and local manufacturers.