Section 25C of the Customs Act, 1969, as updated for tax year 2026, grants Pakistan Customs extraordinary powers to take over imported goods when authorities believe that the declared customs value is understated.
This provision is highly relevant for importers, clearing agents, customs consultants, and enforcement authorities, as it directly affects cargo clearance, valuation disputes, and financial exposure.
This interactive, SEO-optimized guide explains how Section 25C works, when Customs can intervene, and what rights and risks importers face.
Why Section 25C Exists
Section 25C was introduced to:
• Prevent undervaluation of imports
• Protect government revenue
• Discourage manipulation of invoice values
• Create a market-based valuation check through third-party offers
Unlike normal valuation under Sections 25 or 25A, Section 25C allows Customs to step into the transaction itself.
When Can Pakistan Customs Invoke Section 25C?
Customs may invoke Section 25C if all of the following conditions exist:
• An importer files a goods declaration with a declared value
• A third party submits a written offer to buy the same imported goods
• The offer is substantially higher than the declared value
• The Collector of Customs is satisfied that the declared value is not the true transaction value
• Approval is obtained from the Chief Collector of Customs
Step-by-Step Process Under Section 25C(1)
Step 1: Third-Party Purchase Offer
Any person may submit a written offer to purchase the imported goods at a value higher than the declared customs value.
Mandatory requirement:
• Offer must be accompanied by a pay order equal to 25% of the offered value
• Duties and taxes must be calculated based on the offered value
Step 2: Customs Evaluates the Offer
If the Collector:
• Finds the declared value unrealistic, and
• Considers the offer genuine and substantially higher
He may, with Chief Collector’s approval:
• Entertain competing higher offers, and
• Move to the next statutory stage
Step 3: Option Given to Importer
Customs must issue a written option notice to the importer:
• Importer is offered clearance of goods
• At the highest offered value, not the originally declared value
• On payment of full customs duties and taxes on that higher value
This step safeguards the importer’s right of first refusal.
Step 4: Seven-Day Deadline
If the importer:
• Fails to clear goods within 7 days of receiving the notice
Then Customs may:
• Take over the imported goods
• Pay the importer:
o Declared customs value, plus
o An additional 5% of the declared value
This takeover is without prejudice to any penalty or legal action.
What Happens After Customs Takes Over the Goods?
Delivery to the Local Buyer (Section 25C(2))
The goods are delivered to the successful offeror after submission of:
1. A pay order in the name of the importer equal to:
o Declared customs value, plus
o 5% additional amount
2. A second pay order in the name of the Collector of Customs equal to:
o Remaining value difference, and
o Full customs duties and other taxes
This ensures:
• Importer is compensated
• Government revenue is protected
What If the Local Buyer Defaults? (Section 25C(3))
If the local buyer:
• Fails to take delivery, or
• Does not pay the required amounts
Then:
• The 25% pay order is forfeited to the Federal Government
• Goods are released back to the importer
• Valuation reverts to Sections 25 or 25A, as applicable
Key Financial Implications for Importers
• Loss of goods at declared value + 5%
• Exposure to penalties for undervaluation
• Delays and demurrage costs
• Increased scrutiny in future imports
Practical Compliance Tips for Importers (2026)
• Declare true transactional value with evidence
• Maintain complete invoices, contracts, and payment records
• Avoid aggressive undervaluation strategies
• Respond promptly to Section 25C notices
• Seek legal or customs advisory support immediately
Frequently Asked Questions (FAQs)
Q: Can Customs take over goods without importer consent?
Yes, if statutory conditions under Section 25C are fulfilled.
Q: Is Section 25C applicable to all imports?
Yes, where undervaluation and third-party offers exist.
Q: Can importer challenge takeover?
Yes, through legal remedies, but goods may still be taken over during proceedings.
Final Thoughts
Section 25C is one of the strongest enforcement tools available to Pakistan Customs in 2026. It transforms valuation disputes into real market tests, making undervaluation a high-risk strategy.
For importers, accurate declaration is no longer just compliance—it is asset protection.
Disclaimer
This article is published for general information and educational purposes only. It does not constitute legal advice, tax advice, or professional guidance under the Customs Act, 1969 or any rules, notifications, or practices of Pakistan Customs applicable for tax year 2026. While care has been taken to reflect the law accurately, statutory provisions may be amended, interpreted, or applied differently by customs authorities or courts. Importers, exporters, and other stakeholders should seek advice from a licensed customs agent, tax professional, or legal advisor before taking any action based on this information.