ISLAMABAD: Customs authorities have been empowered to confiscate properties that are acquired through proceeds of smuggling.
(more…)Tag: Customs Act 1969
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Key changes to customs laws amended through Finance Bill 2020
ISLAMABAD: The government has announced major changes to Customs Act, 1969 through Finance Bill, 2020.
EY Ford Rhodes Chartered Accountants highlighted the key changes to Customs Act, 1969 that are amended through Finance Bill, 2020.
Following are the key changes introduced through Finance Bill, 2020:
- Procedure to obtain advance ruling has been prescribed along with revision in the definition of advance ruling
- The penalties related to smuggling are proposed to be more rationalized along with the change in the definition of smuggling, to broaden its scope.
- It is proposed to decide cases related to smuggling by the ATIR within a period of thirty days.
- Exemption of customs duties on imports for setting up new industries in erstwhile FATA area is proposed to be extended up to year 2023.
- Concessions available to Special Economic Zones are proposed to be enhanced.
- Tariff protection is proposed for domestic industry by increasing / levy of regulatory duty on import of items which are locally manufactured.
- Customs duty on 90 Tariff lines are proposed to be reduced from 11 percent to 3 percent and 0 percent for the purpose of Tariff rationalization under National Tariff Policy, 2019.
- To boost exports and to secure domestic manufacturing sector, duties on more than 40 tariff lines are proposed to be exempted or reduced.
- Reduction in regulatory duty on several items is proposed to discourage the smuggling of goods and to decrease the cost of doing business in several sectors.
- Extension in exemption period, which was due to be expired on 20 June 2020, from customs duties on import of goods including edible oils and oil seeds covered under COVID-19 relief package.
- Exemption / reduction in customs duty is proposed to be available to the manufacturers, subject to IOCO quota determination, in respect of the following-
- Exemption – Butyl Acetate, Syringes and saline infusion sets, buttons, raw material for beverage can manufacturing and import of machinery, equipment and other project related items for setting up of internet cable landing station.
- Reduction – Raw material for manufacturing of interlining/bukram, wire rod, food packaging.
- Additional customs duty is proposed to be reduced on those tariffs lines on which customs duty is applicable at 0 percent, including on Palm Stearin for incentivizing soap manufacturing industry.
- Regulatory duty on Hot Rolled Coils (HRC) of Iron and steel falling under PCT Codes 7208 and 7225 & 7226 respectively is proposed to be reduced from 12.5 percent and 17.5 percent to 6 percent and 11 percent respectively.
- Exemption in duties & taxes on import of dietetic foods for children with inherited metabolic disorders, diagnostic kits for cancer and corona virus, Ready to use Supplementary Foods (RUSF), lifesaving drug Meglumine Antimonite for treatment of leishmaniasis.
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Customs law amended related to burden of proof
ISLAMABAD: The Finance Bill 2020 has made amendments to Customs Act, 1969 and made it mandatory for a person alleged of any offence is required to prove that property acquired by him is not from proceed of crime.
The Finance Bill 2020 proposed to amend Section 187 of Customs Act, 1969. Following amendment has been proposed (changes in red):
187. Burden of proof as to lawful authority etc.- When any person is alleged to have committed an offence under this Act and any question arises whether he did any act or was in possession of anything with lawful authority or under a permit, license or other document prescribed by or under any law for the time being in force, the burden of proving that he had such authority, permit, license or other document shall lie on him:
“Provided that any person, alleged to have committed an offence under this Act, shall bear the burden of proof that any property owned by him in his name or someone else name was not acquired from the proceeds of such crime:
Provided further that the procedure for forfeiture of such property shall be prescribed by the Board under the rules.”;
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Concealment of currency, gold in baggage to be treated as smuggling
ISLAMABAD: The Finance Bill 2020 has made amendments to Customs Act, 1969 and defined any concealment of currency or gold in passengers’ baggage shall be treated as smuggling.
In this regard amendment made to Section 139 of Customs Act, 1969 through Finance Bill, 2020 issued on Friday.
(Note: Amendments in red)
139. Declaration by passenger or crew of baggage.- (1) The owner of any baggage whether a passenger or a member of the crew shall, for the purposes of clearing it, make a verbal or written declaration of its contents in such manner as may be prescribed by rules to the appropriate officer and shall answer such questions as the said officer may put to him with respect to his baggage and any article contained therein or carried with him and shall produce such baggage and any such articles for examination:
Provided that where the Customs Computerized System is operational, all declarations and communications shall be electronic.
“(2) Where any passenger or a member of the crew makes a false declaration or fails to make such declaration as required under sub-section (1), he shall be guilty of an offence under this Act.”; and
“(3) Notwithstanding the provisions of sub-section (2), where any person attempts to bring into or takes out of Pakistan, currency, gold, precious metals or stones, in any form, through concealment in baggage or circumventing customs controls at airports, sea-ports and land border custom-stations, he shall be guilty of an offence of smuggling within the meaning of clause (s) of section 2.”
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Law tightened to prevent fiscal fraud on imported goods
ISLAMABAD: The Finance Bill, 2020 issued on Friday has proposed tightening customs law to prevent fiscal fraud on imported goods.
The bill proposed amendment to Section 32A of Customs Act, 1969 which is related to fiscal fraud.
A new clause (ca) has been proposed to insert to the section, which is:
“(ca) declares value which is significantly higher or lower than the actual value, that is, the price actually paid or payable for the goods when sold for export to Pakistan, proceedings may be initiated under this section subject to conditions or limitations as may be prescribed by the Board under the rules;”; and
in clause (e), for the expression “(c)” the expression “(c), (ca)” shall be shall be substituted; and
In sub-section (2), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
“Provided that an offence, having no revenue implication but covered under sub-section (1), shall also be served with show cause notice within a period of one hundred and eighty days of detection of such fraud for penal action under the relevant provisions of law.”;
The existing text of the Section is read as:
32A. Fiscal fraud.- (1) If any person, in connection with any matter related to customs-
(a) causes to submit documents including those filed electronically, which are concocted, altered, mutilated, false, forged, tempered or counterfeit to a functionary of customs;
(b) declares in the goods declaration electronically filed customs declaration, the name and address of any exporter or importer which is physically non-existent at the given address;
(c) declares in the goods declaration electronically filed customs declaration, an untrue information regarding payment of duties and taxes through self-assessment, description, quantity, quality, origin and value of goods;
(d) alters, mutilates or suppresses any finding of the customs functionary on any document or in the computerized record; or
(e) attempts, abets or connives in any action mentioned in clauses (a), (b), (c) and (d) above, he shall be guilty of an offence under this section.
(2) Where, by any reason as referred to in sub-section (1) as aforesaid, any duty or tax charged or fee or fine and penalty levied under any provision of law has not been levied or has been short levied or has been refunded, the person liable to pay any amount on that account shall be served with a notice within a period of 180 days of the date of detection of such custom duty and tax fraud, requiring him to show cause as to why he should not pay the amount specified in the notice along with any other amount imposed as fine or penalty under the provisions of this Act.
(3) The appropriate Adjudicating Officer, after considering the written or verbal representation of such person, may determine the amount of duty or tax chargeable or fee payable by such person which shall in no case exceed the amount specified in the notice and such person shall pay the amount so determined besides the fine or penalty or both.
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No claim of compensation against customs officials
KARACHI: An owner of goods has not entitled for claiming compensation from customs officials for any damage done during lawful detention.
Customs officials said that in case any consignment is detained lawfully and during detention any damage occurred to the goods unintentionally then the owner of goods cannot claim compensation for such damage.
They said that Section 216 of Customs Act, 1969 explained as:
Section 216: No compensation for loss or injury except on proof of neglect or willful act
No owner of goods shall be entitled to claim from any officer of customs compensation for the loss of such goods or for damage done to them at any time while they remain or are lawfully detained in any custom-house, customs area, wharf or landing place under the charge of any officer of custom, unless it be proved that such loss or damage was occasioned by gross negligence or willful act of such officer.
Section 214: Remission of duty and payment of compensation to the owner in certain cases
Where, on prosecution by the owner of any goods, an officer of customs is convicted of an offence connected with the removal of such goods from the warehouse without payment of duty, the whole of the duty on such goods shall be remitted, and, the Collector of Customs, shall, in accordance with the rules, pay to the owner due compensation for the damage caused to the owner by such offence.
Section 215: Service of order, decision, etc
Any order or decision passed or any summons or notice issued under this Act shall be served-
(a) by tendering the order, decision, summons or notice or sending it by registered post or the courier service or by any other mode of transmission subject to acknowledgement receipt to the person for whom it is intended or to his agent; or
(b) if the order, decision, summons or notice cannot be served in any manner provided in clause (a), by affixing it on the notice board of the custom-house; or
(c) in case of electronic orders, decisions, notices or summons, when these have been sent to the recipient from the Customs Computerized System.
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Tax Amendment Ordinance: highlights of changes in customs law
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued salient features of to highlight amendments to Customs Act, 1969 made through Tax Law (Second Amendment) Ordinance, 2019.
Following are the salient features of changes made to customs law:
1. After section 3CC, the following new section is proposed to be inserted:-
“3CCC. Directorate General of Law and Prosecution. – The Directorate General of Law and Prosecution is being proposed for the reason that in all the Collectorates and Directorates there are a number of cases which are framed for evasion of duty/taxes but owing to excessive work load and lack of expertise on the prosecution side the cases are not properly defended at subsequent legal fora. The Directorate General of Law and Prosecution will be established with specific power to handle legal issue and equipped with staff expert in handling legal issues.
2. The penal clause 47A of section 156(1) provides for fix penalty @ Rs.5000/- for initial five days and thereafter @ Rs.10000/- per day upto a maximum limit of Rs.100000/- in case GD is filed after ten days of the date of arrival of goods into Pakistan.
This clause was inserted to realize stuck up Government revenue as importer will suitably discharge their liabilities to avoid their penalties. However, bonafide person need to be excluded from this penal clause.
However, the intent of the proposed amendment is to exclude the goods imported or received as gift by individuals without NTN or STRN through courier or air cargo, diplomatic cargo and imports made by government agencies.
3. Changes are being proposed in section 156 to penalize persons carrying foreign currency. Previously, a person carrying foreign currency beyond the permissible amount of $10000 was being prosecuted.
It is now being proposed by means of varying slabs being taken by passengers ,ranging from $10000- $200000 and above and accordingly proposing varying degrees of penalties from a mere fine and then imprisonment upto fourteen years depending on the amount of currency apprehended by the authorities.
Similarly, slabs for smuggling of Gold, platinum and Silver has been proposed along with their varying degrees of fine and imprisonment depending on the quantum of precious metals.
4. Owing to surge in smuggling activities and knowing that smugglers as well equipped, it is being proposed that section 164 may be suitably amended empowering Customs officials to fire in the Line of Duty.
5. Currently, section 185A specifies the provisions for cognizance of offences by special Judges. It is proposed that a time period of six months may be fixed for the finalization of proceedings in criminal cases because cases keep on lingering without any outcome for years. No time limitation in decision of the case also accords time to the investigating officers to submit final challan without a time limit which aspect weakens the case as the time passed by.
6. Section 194 of the Customs Act, 1969 provides for the constitution of a Customs Appellate Tribunal by the Federal Government which is competent to adjudicate upon appeals filed against orders passed by the Collector (Appeals).
The said section specifies various pre-requisites for appointment as a judicial or technical member and empowers the Federal Government to appoint Chairman of the Customs Appellate Tribunal.
In order to complement revenue collection efforts by FBR, streamline the affairs of the Tribunal(s), bring about greater transparency in the manner of appointment of judicial and technical members of the Tribunal(s) and to impart greater efficiency in the working of the Tribunal for ensuring maximum disposal of cases it is proposed that in addition to the prerequisite as already mentioned, the qualification of Judicial Members may also be prescribed under rules made by the Prime Minister.
Furthermore the constitution and functioning of benches and procedure of the Appellate Tribunal may be regulated by rules approved by the Prime Minister.
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Customs officials empowered using firearms in the line of duty
ISLAMABAD: The government has authorized customs officials to use firearms in the line of duty to prevent smuggling and other illegal activities.
In this regard a new sub-section 3 has been inserted to Customs Act, 1969 through Tax Laws (Second Amendment) Ordinance, 2019.
Federal Board of Revenue (FBR) on Wednesday issued ‘Tax Laws (Second Amendment) Ordinance, 2019’ have been promulgated through the presidential order.
The new sub-section shall be read as follow:
“(3) For the execution of the above, the officers or officials shall be empowered to use all necessary force including use of firearms subject to Section 97 of the Pakistan Penal Code, 1860 in the line of duty.”
Under Section 164 of the Customs Act, 1969, the customs officials were empowered to stop and search conveyances.
The Section 164 is read as:
164. Power to stop and search conveyances.- (1) Where the appropriate officer has reason to believe that within the territories of Pakistan(including territorial waters) any conveyance has been, is being or is about to be, used in the smuggling of any goods or in the carriage of any smuggled goods, he may at any time stop any such conveyance or, in the case of an aircraft, compel it to land, and –
(a) rummage and search any part of the conveyance;
(b) examine and search any goods thereon; and
(c) break open the lock of any door, fixture or package for making search.
(2) Where in the circumstances referred to in sub-section (1)-
(a) it becomes necessary to stop any vessel or compel any aircraft to land, it shall be lawful of any vessel or aircraft in the service of the Government while flying her proper flag or bearing flag marks and any authority authorized in this behalf by the Federal Government to summon such vessel to stop or the aircraft to land, by means of an international signal, code or other recognized means, and thereupon such vessel shall forthwith stop or such aircraft shall forthwith land, and if it fails to do so chase may be given thereto by any vessel or aircraft as aforesaid and if after a gun is fired as a signal, the vessel fails to stop or the aircraft fails to land, it may be fired upon;
(b) it becomes necessary to stop any conveyance other than a vessel or aircraft, the appropriate officer may use or cause to be used all lawful means for stopping it or preventing its escape including, if all other means fail, firing upon it.
The new sub-section shall be included:
“(3) For the execution of the above, the officers or officials shall be empowered to use all necessary force including use of firearms subject to Section 97 of the Pakistan Penal Code, 1860 in the line of duty.”
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Convicted persons to display names at business places
KARACHI: A person, who is convicted in an office of smuggling, is required to display notice of conviction for a period of three months.
If the person fails to do so the he commits further offence.
Under the updated Customs Act, 1969, the section 189 of the Act granted made it compulsory for a person who is convicted for the offence of smuggling to display the notice of conviction.
Section 189: Notice of conviction to be displayed
Sub-Section (1) Upon the conviction of any person for the offence of smuggling, the Federal Government may require him to exhibit in or outside, or both in and outside his place of business, if any, notices, of such number, size and lettering, and placed in such positions and containing such particulars relating to conviction as it may determine, and to keep them so exhibited continuously for a period not less than three months from the date of conviction; and, if he fails to comply fully with the requirement, he shall be deemed to have committed a further offence under this Act of the nature of the original offence for which he was convicted.
Sub-Section (2): If any person so convicted refuses or fails to comply fully with any such requirement, any officer authorized in that behalf by an order of the Federal Government in writing may, without prejudice to any proceedings which may be brought in respect of any such refusal or failure, affix the notices in or outside, or both in and outside, the place of business of such person in accordance with the requirement of the Federal Government in pursuance of sub-section (1).
Sub-Section (3): If, in any case, the Federal Government is satisfied that the exhibition of notices in accordance with the requirements of the provisions of sub-section (1) or sub-section (2) will not effectively bring the conviction to the notice of persons dealing with the convicted person, the Federal Government may, in lieu of, or in addition to any such requirement, require the convicted person to exhibit for such period, not being a period less than three months, on such stationery used in his business as may be specified in the requirement, a notice placed in such position and printed in type of such size and form and containing such particulars relating to the conviction as may be specified in the requirement; and, if he fails to comply fully with the requirement, he shall be deemed to have committed a further offence under this Act of the nature of the original offence for which he was convicted.
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No legal proceeding against customs officials while exercising powers
KARACHI: Customs laws protect officials from legal proceedings in case anything done in good faith while exercising powers.
The FBR issued Customs Act, 1969 updated till June 30, 2019 incorporating amendment brought through Finance Act, 2019.
Section 217 of the Customs Act, 1969 provides protection of action taken under the Act.
Section 217: Protection of action taken under the Act
Sub-Section (1) :No suit, prosecution or other legal proceeding shall lie against the Federal Government or any public servant for anything which is done or intended to be done in good faith in pursuance of this Act or the rules and notwithstanding anything in any other law for the time being in force no investigation or enquiry shall be undertaken or initiated by any governmental agency against any officer or official for anything done in his official capacity under this Act, rules, instructions or directions made or issued thereunder without the prior approval of the Board.
Sub-Section (2): No suit shall be brought in any civil court to set aside or modify any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act.Section 218: Notice of proceedings
No proceeding in a court other than a suit shall be commenced against any officer of customs or any other person exercising any powers conferred or discharging any duties imposed by or under this Act for anything purporting to be done in pursuance of the provisions of this Act or the rules without giving to such officer or person a month’s previous notice in writing of the intended proceeding and of the cause thereof; or after the expiration of one year from the accrual of such cause:
Provided that this section shall not be deemed to apply in the case of the prosecution of an officer of customs or such other person for an offence punishable under this Act.