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Tag: Customs Act 1969

  • Harsh penalties for pilferage of transshipped goods

    Harsh penalties for pilferage of transshipped goods

    KARACHI: Customs laws has defined harsh penalties for pilferage or replaced enroute of transshipment of goods without payment of duty.

    Federal Board of Revenue (FBR) issued Customs Act, 1960 updated till June 30, 2019 incorporating changes brought through Finance Act, 2019.

    According to the customs laws

    If any goods which are loaded for transshipment, are pilfered, replaced en-route or failed to reach the port of destination, or any person transships goods not allowed to be transshipped;

    Then such goods and the conveyance illegally carrying these goods shall be liable to confiscation and any person including the custodian involved in the offence and the bonded carrier shall be liable to a penalty not exceeding ten times the value of the goods and he shall further be liable, upon conviction by a Special Judge, to imprisonment for a term not exceeding seven years.

    If any person contravenes any rule relating to transshipment other than mentioned above;

    Then such person including the custodian and the inland carrier shall be liable to penalty not exceeding five hundred thousand rupees or three times the amount of duties and taxes involved.

    Under Section 121 of the Act, the transshipment of goods without payment of duty has been allowed.

    Section 121: Transshipment of goods without payment of duty

    Sub-Section (1): Subject to the provisions of section 15 and the rules, the appropriate officer may, on application by the owner of any goods imported at any customs-station and specially and distinctly manifested at the time of importation as for transshipment to some other customs-station or foreign destination, grant leave to transship the same without payment of duty, if any, chargeable on such goods with or without any security or bond for the due arrival and entry of the goods at the customs-station of destination:

    Provided that at customs-station where the Custom Computerized System, is operational, the system may automatically authorize transshipment to other customs-station subject to risk selectivity criteria.

    Sub-Section (2): The Board may, subject to rules and such conditions as it may deem fit to impose, authorize certain carriers to transport goods under the multimodal, scheme. Goods transported under the multimodal scheme shall be specially and distinctly manifested at the time of importation as for transshipment to some other customs-station or foreign destination and shall not –

    (a) require distinct permission for transshipment from the customs-station of first entry into the country to be transported to the customs-station of destination. The principal carrier issuing the multimodal bill of lading or air way bill will be responsible for the sanctity of the cargo during transportation between the customs-station of first entry into the country to the customs-station of destination; and

    (b) be subject to the risk management system at the customs station of first entry.

    Sub-Section (3): The Board may, subject to such conditions as it may deem fit, grant license to any carrier to carry goods under the multimodal scheme.

  • Penalties for smuggling under Pakistan’s customs law

    Penalties for smuggling under Pakistan’s customs law

    KARACHI: Award of death sentence has been prescribed for smuggling of narcotic drugs under Customs law of Pakistan.

    The Federal Board of Revenue (FBR) updated Customs Act, 1969 updated till June 30, 2019 which explained penalties for different penalties.

    According Customs Act, 1969:

    • If any goods be smuggled into or out of Pakistan:

    Such goods shall be liable to confiscation and any person concerned in the offence shall be liable to a penalty not exceeding ten times the value of the goods; and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding fourteen years and to fine not exceeding ten times the value of such goods:

    Provided that, in the case of such goods as may be notified by the Federal Government in the official Gazette, the sentence of imprisonment shall not be less than five years, and the whole or any part of his property shall also be liable to confiscation in accordance with the provisions of the Prevention of Smuggling Act,1977.

    • If the smuggled goods are narcotics drugs, psychotropic substances or controlled substances,-

    such goods shall be liable to confiscation and any person concerned in the offence shall be liable to –

    (a) if the quantity of the narcotic drug, psychotropic substance of controlled substance is one hundred grams or less;

    • imprisonment which may extend to two years, or with fine, or with both;
    • imprisonment which may extend to seven years and shall also be liable to fine;

    (b) if the quantity of the narcotic drug, psychotropic substance or controlled substance exceeds one hundred grams but does not exceed one kilogram;

    death or imprisonment for life, or imprisonment for a term which may extend to fourteen years and shall also be liable to fine which may be up to one million rupees;

    (c) if the quantity of the narcotic drug, psychotropic substance or controlled substance exceeds the limit specified in clause (b);

    Provided that, if the quantity exceeds ten kilograms the punishment shall not be less than imprisonment for life.

  • Importers require filing declaration within 10 days of goods arrival

    Importers require filing declaration within 10 days of goods arrival

    KARACHI: Importers are required to file goods declaration within 10 days of arrival of goods at the port of entry.

    The Federal Board of Revenue (FBR) issued Customs Act, 1969 update till June 30, 2019 incorporating changes brought through Finance Act, 2019.

    Prior to Finance Act, 2019 the importers were allowed to file goods declaration within 15 days.

    Section 79 of the Customs Act, 1969 described the filing of declaration and assessment.

    Section 79: Declaration and assessment for home consumption or warehousing or transshipment.-

    Sub-Section (1): The owner of any imported goods shall make entry of such goods for home consumption or warehousing or transshipment or for any other approved purposes, within ten days of the arrival of the goods, by,-

    (a) filing a true declaration of goods, giving therein complete and correct particulars of such goods, duly supported by commercial invoice, bill of lading or airway bill, packing list or any other document required for clearance of such goods in such form and manner as the Board may prescribe ; and

    (b) assessing and paying his liability of duty, taxes and other charges thereon, in case of a registered user of the Customs Computerized System:

    Provided that if, in case of used goods, before filing of goods declaration, the owner makes a request to an officer of customs not below the rank of an Additional Collector that he is unable, for want of full information, to make a correct and complete declaration of the goods, then such officer subject to such conditions as he may deem fit, may permit the owner to examine the goods and thereafter make entry of such goods by filing a goods declaration after having assessed and paid his liabilities of duties, taxes and other charges:

    Provided further that no goods declaration shall be filed prior to ten days of the expected time of arrival of the vessel.

    Explanation.- For the purposes of this clause, the assessment and paying of duty, taxes and other charges in respect of transshipment shall be at the port of destination.

    Sub-Section (2): If an officer, not below the rank of Additional Collector of Customs, is satisfied that the rate of customs duty is not adversely affected and that there was no intention to defraud, he may, in exceptional circumstances and for reasons to be recorded in writing, permit, substitution of a goods declaration for home consumption for a goods declaration for warehousing or vice versa.

    Sub-Section (3): An officer of Customs, not below the rank of Assistant Collector of Customs, may in case of goods requiring immediate release allow release thereof prior to presentation of a goods declaration subject to such conditions and restrictions as may be prescribed by the Board.

  • Customs to secure deferential duty, taxes on provisional assessment

    Customs to secure deferential duty, taxes on provisional assessment

    KARACHI: Importers are liable to deposit bank guarantee against deferential amount assessed provisionally by customs authorities on those consignments, which required further examination.

    The Federal Board of Revenue (FBR) issued Customs Act, 1969 updated till June 30, 2019 incorporating changes brought through Finance Act, 2019. The updated act explained through Section 81 the security of deferential amount in provisional determination liability.

    Section 81: Provisional determination of liability

    Sub-Section (1): Where it is not possible for an officer of Customs during the checking of the goods declaration to satisfy himself of the correctness of the assessment of the goods made under section 79 or 131, for reasons that the goods require chemical or other test or a further inquiry, an officer, not below the rank of Assistant Collector of Customs, may order that the duty, taxes and other charges payable on such goods, be determined provisionally:

    Provided that the importer, save in the case of goods entered for warehousing, pays such additional amount on the basis of provisional assessment or furnishes bank guarantee or pay order of a scheduled bank along with an indemnity bond for the payment thereof as the said officer deems sufficient to meet the likely differential between the final determination of duty, taxes and other charges over the amount determined provisionally:

    Provided further that there shall be no provisional assessment under this section if no differential amount of duty and taxes and other charges is paid or secured against bank guarantee or pay order.

    Sub-Section (2): Where any goods are allowed to be cleared or delivered on the basis of such provisional determination, the amount of duty, taxes and charges correctly payable on those goods shall be determined within six months of the date of provisional determination:

    Provided that the Collector of Customs or, as the case may be, Director of Valuation, may in circumstances of exceptional nature and after recording such circumstances, extend the period for final determination which shall in no case exceed ninety days:

    Provided further that any period, during which the proceedings are adjourned on account of a stay order or for want of clarification from the Board or the time taken through adjournment by the importer, shall be excluded for the computation of aforesaid periods.

    Sub-Section (3): On completion of final determination, the amount already paid or guaranteed shall be adjusted against the amount payable on the basis of final determination, and the difference between the two amounts shall be paid forthwith to or by the importer, as the case may be.

    Sub-Section (4): If the final determination is not made with the period specified in sub-section (2), the provisional determination shall, in the absence of any new evidence, be deemed to be the final determination.

    Sub-Section (5): On completion of final determination under sub-section (3) or (4), the appropriate officer shall issue an order for adjustment, refund or recovery of amount determined, as the case may be.

    Explanation.- Provisional assessment means the amount of duties and taxes paid or secured against bank guarantee or pay order.

  • Provisional release of offended imported goods

    Provisional release of offended imported goods

    KARACHI: The collector of customs has been empowered to allow provisional release of imported goods, on which any offence is detected, against duty and payment and submission of bank guarantee for penalty amount.

    The Federal Board of Revenue (FBR) issued Customs Act, 1969 updated till June 30, 2019 incorporating the changes brought through Finance Act, 2019.

    According to the Customs Act, 1969, where any offence is detected in respect of imported goods which are not liable to confiscation or needed for evidence at a later stage, the Collector of Customs may, on written request of owner of the goods, allow release of the same on payment of duty, taxes or other charges and furnishing bank guarantee or pay order against the amount of any penalty or fine which may be imposed on such goods.

    The FBR also explained the clearance for home consumption under Section 83 of the Act.

    It said that when the owner of any goods entered for home-consumption and assessed under section 80 or 81 has paid the import duty and other charges, if any, in respect of the same the appropriate officer, if he is satisfied that the import of the goods is not prohibited or in breach of any restrictions or conditions applying to the import of such goods, may make an order for the clearance of the same:

    Provided that, at customs-stations where the Customs Computerized System is operational the system may clear the goods through system generated clearance documents.

    (2) Where the owner fails to pay import duty and other charges within ten days from the date on which the same has been assessed under sections 80, or 81, he shall be liable to pay surcharge at the rate of KIBOR plus three percent on import duty and other charges payable on such goods.

  • Customs empowered to stop vessel departure till payment of dues

    Customs empowered to stop vessel departure till payment of dues

    KARACHI: Pakistan Customs has been empowered to refuse clearance of vessel until payment of dues including port dues and other charges and penalties.

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  • Repayment of drawback of export on imported goods explained

    Repayment of drawback of export on imported goods explained

    KARACHI: Federal Board of Revenue (FBR) has explained repayment of drawback of the export on imported goods under Customs Act 1969.

    The FBR issued Customs Act, 1969 updated till June 30, 2019 incorporating changes brought through Finance Act, 2019.

    Following are the provisions explaining the repayment of drawback:

    Section 35: Drawback of the export on imported goods

    Subject to the subsequent provisions of this Chapter and the rules, when any goods, capable of being easily identified, which have been imported into Pakistan and upon which customs-duties have been paid on importation, are exported to any place outside Pakistan or as provisions or stores for use on board a conveyance proceeding to a foreign territory, seven-eight of such duties shall be repaid as drawback, subject to the following conditions, namely:-

    (1) the goods are identified to the satisfaction of an officer of customs not below the rank of Assistant Collector of Customs at the customs-station, to be the same as had been imported, and

    (2) the goods are entered for export within two years of the date of their importation, as shown by the records of the custom-house or if such time is extended by the Board or the Collector of Customs for sufficient cause within such extended time:

    Provided that the Collector of Customs shall not extend the time beyond three years of the importation of such goods.

    Explanation.- For the purposes of this section, the goods shall be deemed to have been entered for export on the date on which the 3 [goods declaration] is delivered to the appropriate officer under section 131.

    Section 36: Drawback on goods taken into use between importation and exportation

    Notwithstanding anything contained in section 35, the repayment of duty as drawback in respect of goods which have been taken into use between their importation and subsequent exportation shall be made in accordance with the provisions of the rules made in that behalf.

    Section 37: Drawback on goods used in the manufacture of goods which are exported

    Where it appears to the Board that in respect of goods of any class or description manufactured in Pakistan and exported to any place outside Pakistan, a drawback of customs-duties should be allowed on any imported goods of a class or description used in the manufacture of such exported goods, the Board may, by notification in the official Gazette, direct that drawback shall be allowed in respect of such imported goods to such extent and subject to such condition as may be provided in the rules.

    Section 38: Power to declare what goods are identifiable and to prohibit draw-back in case of specified foreign territory

    (1) The Board may, from time to time, by notification in the official Gazette, declare what goods shall, for the purposes of this Chapter, be deemed to be not capable of being easily identified.

    (2) The 5[Federal Government ] may, from time to time, by notification in the official Gazette, prohibit the payment of drawback upon the exportation of goods or any specified goods or class of goods to any specified foreign port or territory.

    Section 39: When no drawback allowed

    Notwithstanding anything hereinbefore contained, no drawback shall be allowed-

    (a) upon goods which are required to be included in the export manifest and are not so included, or

    (b) when the claim is for drawback amounting, in respect of any single shipment, to less than or equal to hundred rupees, or

    (c) unless the claim for drawback has been made and established at the time of export.

    Section 40: Time of payment of drawback

    No such payment of drawback shall be made until the vessel carrying the goods has put out to sea or other conveyance has left Pakistan.

    Section 41: Declaration by parties claiming drawback

    Every person, or his duly authorized agent, claiming drawback on any goods duly exported, shall make and subscribe a declaration that such goods have been actually exported and have not been relanded and are not intended to be relanded at any place in Pakistan and that such person was at the time of entry outwards and export and continues to be entitled to drawback thereon.

  • Refunds of customs duties to be claimed within one year

    Refunds of customs duties to be claimed within one year

    KARACHI: Federal Board of Revenue (FBR) has said that the refunds against customs duties would be paid if claims have been made within one year.

    The FBR issued Customs Act, 1969 updated till June 30, 2019 incorporating changes brought through Finance Act, 2019.

    The FBR explained through Section 33 of the Act that refunds f customs duties would be paid if claims had been made within one year.

    Section 33: Refund to be claimed within one year.

    Sub-Section (1): No refund of any customs-duties or charges claimed to have been paid or over-paid through inadvertence, error or misconstruction shall be allowed, unless such claim is made within one year of the date of payment.

    Sub-Section (2): In the case of provisional payments made under section 81, the said period of one year shall be reckoned from the date of the adjustment of duty after its final assessment.

    Sub-Section (3): In the case where refund has become due in consequence of any decision or judgment by any appropriate officer of Customs or the Board or the Appellate Tribunal or the Court, the said period of one year shall be reckoned from the date of such decision or judgment, as the case may be.

    Sub-Section (3A): The claim filed under this section shall be disposed of subject to pre-audit within a period not exceeding one hundred and twenty days from the date of filing of such claim:

    Provided that the said period may, for reasons to be recorded in writing, be extended by the Collector of Customs for a period not exceeding ninety days.

    Sub-Section (4): No refund shall be allowed under this section, if the sanctioning authority is satisfied that the incidence of customs duty and other levies has been passed on to the buyer or consumer.

    Sub-Section (5): For the purpose of this section, the Board may, by notification in the official Gazette, specify the jurisdiction and powers of the officers of Customs to sanction refund in terms of amount of Customs duty and other taxes involved.

    Section 34: Power to give credit for, and keep account-current of duties and charges.

    An officer of customs, not below the rank of Assistant Collector of customs may, in the case of any mercantile firm or public body, if he so thinks fit, instead of requiring payment of customs duties or charges as and when they become due, keep with such firm or body an account-current of such duties and charges, which account shall be settled at intervals of not exceeding one month, and such firm or body shall make a deposit or furnish a security sufficient in the opinion of that officer to cover the amount which may at any time be payable by it in respect of such duties or charges.

  • Date of determination of import duty rate under Customs laws

    Date of determination of import duty rate under Customs laws

    KARACHI: Federal Board of Revenue (FBR) has explained determination of rate of import duty under Customs Act, 1969.

    The FBR issued Customs Act, 1969 updated till June 30, 2019 incorporating changes brought through Finance Act, 2019. Section 30 of the Act explained date of determination of rate of import duty.

    Section 30: Date of determination of rate of import duty

    The rate of duty applicable to any imported goods shall be the rate of duty in force;

    (a) in the case of goods cleared for home consumption under section 79, on the date on which a goods declaration is manifested under that section; and

    (b) in the case of goods cleared from a warehouse under section 104, on the date on which a goods declaration for clearance of such goods is manifested under that section:

    Provided that, where a goods declaration has been manifested in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is delivered at the port of first entry:

    Provided further that, in respect of goods for the clearance of which a goods declaration for clearance has been manifested under section 104, and the duty is not paid within seven days of the goods declaration being manifested, the rate of duty applicable shall be the rate of duty on the date on which the duty is actually paid:

    Provided further that in case of the goods illegally removed from the warehouse, the rate of duty shall be the rate prevalent either on the date of in-bonding or detection of case or date of payment of the duty and taxes, whichever is higher:

    Provided further that in case of exercising option for redemption of fine in lieu of confiscation of the goods seized during anti-smuggling operations, the rate of duty shall be the rate prevalent either on the date of seizure or date of payment of duty and taxes, whichever is higher:

    Provided further that the Board, with approval of the Federal Minister-in-charge may, by notification in the official Gazette, for any goods or class of goods, specify any other date for the determination of rate of duty.

    Explanation:- For the purpose of this section “manifested” means that when a machine number is allocated to goods declaration and is registered in Customs record.

    Section 30A: Date of determination of rate of duty for clearance through the Customs Computerized System

    Subject to the provisions of section 155A, the rate of duty applicable to any imported or exported goods if cleared through the Customs Computerized System, shall be the rate of duty in force on;-

    (a) the date of payment of duty;

    (b) in case the goods are not chargeable to duty, the date on which the goods declaration is filed with Customs.

    Provided that where a goods declaration has been filed in advance of the arrival of the conveyance by which the goods have been imported, the relevant date for the purposes of this section shall be the date on which the manifest of the conveyance is filed at the customs-station of first entry:

    Provided further that the Board, with approval of the Federal Minister-in-charge may, by notification in the official Gazette, specify any other date for the determination of rate of duty in respect of any goods or class of goods.

    Section 31: Date for determination of rate of duty on goods exported

    The rate and amount of duty applicable to any goods exported shall be the rate and amount chargeable at the time of the delivery of the goods declaration under section 131:

    Provided that where the export of any goods is permitted without a goods declaration or in anticipation of the delivery of such a declaration, the rate and amount of duty applicable shall be the rate and amount chargeable on the date on which loading of the goods on the outgoing conveyance commences:

    Provided further that the Board, with approval of the Federal Minister-in-charge may, by notification in the official Gazette, for any goods or class of goods, specify any other date for determination of the rate of duty.

    Section 31A. Effective rate of duty

    (1) Notwithstanding anything contained in any other law for the time being in force or any decision of any Court, for the purposes of section 30, 30A and 31, the rate of duty applicable to any goods shall include any amount of duty imposed under section 18,18A and 18C and the amount of duty that may have become payable in consequence of the withdrawal of the whole or any part of the exemption or concession from duty whether before or after the conclusion of a contract or agreement for the sale of such goods or opening of a letter of credit in respect thereof.

    (2) For the purpose of determining the value of any imported or exported goods, the rate of exchange at which any foreign currency is to be converted into Pakistan currency shall be the rate of exchange in force on the date immediately preceding the relevant date referred to in sections 30, 30A or 31.

  • Importer to pay KIBOR+3pc on timely payment failure

    Importer to pay KIBOR+3pc on timely payment failure

    KARACHI: An importer in case of failure to pay import duty or other taxes within specified time then the importer shall be liable to pay surcharge at the rate of KIBOR + 3 percent on the due charges.

    According to Customs Act, 1969 updated June 30, 2019 issued by Federal Board of Revenue (FBR), the KIBOR means Karachi Inter Bank Offered Rate prevalent on the first day of each quarter of the financial year.

    According to the Customs Act, 1969, under Section 21A the FBR is allowed to defer collection of customs duty. However, where deferment of customs duties is allowed by the FBR, a surcharge not exceeding KIBOR plus three percent per annum shall also be payable on the deferred amount from such date and in the manner as the FBR may be rules prescribed.

    Similarly, under Section 80 related to clearance of goods for home consumption, the act explained that where the owner fails to pay import duty and other charges within 10 days from the date on which the time same has been assessed under Section 80 or 80, he shall be liable to pay surcharge at the rate of KIBOR plus three percent on import duty and other charges payable on suchg goods.

    Section 86 related to submission of post-dated cheque and indemnity bond, the FBR said:

    When any such application has been made in respect of any goods, the owner of the goods to which it relates shall furnish an indemnity bond and post-dated cheque equivalent to the duty assessed under section 80 or section 81 or reassessed under section 109 on such goods,-

    (a) to observe all the provisions of this Act and the rules in respect of such goods;

    (b) to pay on or before a date specified in a notice of demand all duties, taxes, rent and charges payable in respect of such goods together with surcharge on the same from the date so specified at the rate of KIBOR plus three per cent per annum or such other rate as is for the time being fixed by the Board; and

    (c) to discharge all penalties incurred for violation of the provisions of this Act and the rules in respect of such goods.

    The Section 202A related to levy of surcharge, explained that notwithstanding anything contained in this Act and without prejudice to any other action that may be taken thereunder, if any person fails to pay the arrears within the prescribed time, he shall, in addition to the arrears, be liable to pay surcharge at the rate of KIBOR plus three per cent per annum, of the total amount of arrears.