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Tag: Customs Act 1969

  • Transfer of funds through misdeclaration included into punishable offences

    Transfer of funds through misdeclaration included into punishable offences

    KARACHI: Federal Board of Revenue (FBR) has included illegal transfer of funds through mis-declaration into the list of punishable offences.

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

    The customs officials said that a new section 32C was introduced to Customs Act, 1969 through Finance Act, 2019 for including misdeclaration of value for illegal transfer of funds into or out of Pakistan as punishable offence under the customs law.

    Section 32C: Mis-declaration of Value for illegal transfer of funds into or out of Pakistan.

    (1) Without prejudice to any action that may be taken under this Act or any other law for the time being in force, if any person overstates the value of imported goods or understates the value of exported goods or vice versa, or using other means including short-shipment, over-shipment, with a view to illegally transferring funds into or out of Pakistan, such person shall be served with a notice to show cause within a period of two years from the date of detection of such mis-declaration as to why penal action shall not be initiated:

    Provided that if goods have not been cleared from customs, such goods shall also be liable to be seized:

    Provided further that a team consisting of Additional Collector, duly assisted by an expert in the relevant field and an officer of State Bank of Pakistan (SBP) as specified, shall submit a report in writing with evidence for the Chief Collector. The said report shall also be furnished to the SBP for action, if any, under the law regulated by SBP.

    (2) Any proceedings under this section, shall not be initiated, without the explicit approval of Board.

    The customs officials said that if any person commits offence under this section then such person shall be liable to penalty not exceeding two hundred thousand rupees or three times the value of goods in respect of which such offence is committed whichever is greater; and such goods shall be liable to confiscation.

    Further, upon conviction by a special judge the offender shall be liable to imprisonment for a term not exceeding five years and to a fine which may extend up to one million rupees.

  • Persons committing fiscal fraud liable to 10 years jail under Customs laws

    Persons committing fiscal fraud liable to 10 years jail under Customs laws

    KARACHI: A person is liable to jail punishment up to 10 years in case of committing fiscal fraud under Customs Act, 1969.

    The Federal Board of Revenue (FBR) recently updated Customs Act, 1969 under which if a person commits and offence of fiscal fraud under Section 32A of the Act then such person is liable to penalty and imprisonment.

    According to the Customs Act, 1969:

    If any person commits an offence under section 32A such person shall be liable to a penalty not exceeding three times the value of the goods in respect of which such offence is committed and such goods shall also be liable to confiscation and upon conviction by a Special Judge he shall further be liable to imprisonment for a term which may extend to ten years but shall not be less than five years or to fine, or to both.

    The act explained the fiscal fraud 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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    Customs officers authorized business access for audit

  • Customs officers authorized business access for audit

    Customs officers authorized business access for audit

    KARACHI: Customs officers have been authorized under customs laws to enter business premises to access records necessary for the purpose of audit.

    Federal Board of Revenue (FBR) issued Customs Act, 1969 updated up to June 30, 2019 incorporating amendments introduced through Finance Act, 2019.

    The Section 26B of the Act authorizes customs officers to access record for the purpose of audit.

    Section 26B: Access for the purposes of audit.-

    Sub-Section (1): The appropriate officer of Customs, after giving a notice in writing specifying the date of visit, shall have access to business or manufacturing premises, registered office or any other place where any goods, stocks, documents or records relating to the ongoing audit are kept or maintained. Such officer may inspect the goods, stocks, documents, records, data, correspondence, accounts, statements, utility bills, bank statements, information regarding nature and sources of funds or assets with which his business is financed, and any other records or documents required under any Federal or Provincial laws, maintained in any form or mode. Such an officer may take into his custody such documents, records or any part thereof, in such form as he may deem fit, against a signed receipt.

    Sub-Section (2): In all cases, except where it would defeat the purpose of the audit, a reasonable advance notice regarding a visit shall be given to the person concerned.

    Sub-Section (3): Whosoever causes any obstruction or fails to provide any documents, record, statement etc, as required under subsection (1), with an intention to defeat the purpose of the Act by way of destroying, altering or concealing any books, documents or records required to be maintained under this Act, shall be guilty of an offence under this section.

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    Determination of values for imports and exports under Customs Act

  • Any person can takeover imported goods by offering higher customs value

    Any person can takeover imported goods by offering higher customs value

    KARACHI: In order to prevent under-invoicing and mis-declaration the customs authorities have powers to accept offer from any person to allow clearance at higher value than the declared by an importer for the same consignment.

    The Customs Act, 1969 has authorized the customs officials to allow such offer under Section 25C of the Act to takeover the imported goods.

    Section 25: Power to takeover the imported goods

    Sub-Section (1): If any person makes an offer in writing to buy the imported goods sought to be cleared at value declared by an importer in the goods declaration, and the Collector of Customs is satisfied that the declared value is not the actual transactional value, he may after approval of the Board order the following without prejudice to any other action against the importer or his authorized agent, namely:-

    (i) entertain offer by any other person to buy these goods at substantially higher value than the declared customs value in the goods declaration and payment of customs duties and other leviable taxes thereon, provided such offer is accompanied by a pay order equal to twenty-five per cent of the amount of each such offer and duties and other taxes calculated in accordance with the offer;

    (ii) give an option in writing to the importer of such goods for clearance of imported goods at the customs value equal to such highest offer for purchase of goods and payment of customs duties and other taxes chargeable thereon; and

    (iii) in case the importer fails to clear the imported goods within seven days of the receipt of notice under clause (ii) above, the appropriate officer may takeover the goods on payment of customs value declared in the goods declaration and an amount equal to five per cent of such declared value;

    Sub-Section (2): The imported goods taken over under sub-section (1) shall be delivered to the offerer on submission of two pay orders, one equal to the customs value declared in the goods declaration plus five per cent in the name of importer and the other pay order equal to the remaining amount of value of imported goods and the amount of customs duties and other taxes leviable on the imported goods in the name of Collector of Customs;

    Sub-Section (3): In case the local buyer fails to take the delivery of the goods on payment of value and taxes as prescribed in sub-section (2) above, the pay order equal to twenty-five per cent of the amount shall be fore-feited in favour of the Federal Government and imported goods shall be released to the importer as per customs value determined under sections 25 or 25A as the case may be.

  • Determination of values for imports and exports under Customs Act

    Determination of values for imports and exports under Customs Act

    The Federal Board of Revenue (FBR) has recently issued updates to the Customs Act, 1969, incorporating changes introduced through the Finance Act, 2019. The amendments primarily focus on the determination of customs values for the collection of duties and taxes on imports or exports of goods under Section 25 of the Customs Act.

    (more…)
  • Customs duty to apply on re-importation of goods manufactured in Pakistan

    Customs duty to apply on re-importation of goods manufactured in Pakistan

    KARACHI: Federal Board of Revenue (FBR) has said that customs duty shall be applied on re-importation of goods that are manufactured and exported from Pakistan.

    The FBR issued Customs Act, 1969 updated June 30, 2019 and explained re-importation of goods produced or manufactured in Pakistan under section 22 of the Act.

    Section 22: Re-importation of goods produced or manufactured in Pakistan

    If goods produced or manufactured in and exported from Pakistan are subsequently imported into Pakistan, such goods shall be liable to customs-duties and be subject to all the conditions and restrictions, if any, to which goods of the like kind and value not so produced or manufactured are liable on the importation thereof:

    Provided if such goods have been imported within one year of their exportation and have been consigned to the person in whose account they were exported and have not undergone any processing since their exportation, the appropriate officer not below the rank of Assistant Collector of Customs may admit the goods-

    (a) Where at the time of exportation of such goods, rebate, refund or drawback of any customs or Federal Excise duty or any other tax levied by the Federal Government or any tax, cess or duty levied by the Provincial Government was allowed on payment of customs duty equal to the amount of such rebate, refund or drawback as the case may be;

    (b) where such goods were exported in bond, without payment of –

    (i) the customs-duty chargeable on the imported materials, if any, used in the manufacture of the goods; or

    (ii ) the Federal Excise duty chargeable on the indigenous materials, if any, used in the manufacture of such goods; or

    (iii) the Federal Excise duty, if any, chargeable on such goods; or

    (iv) any other tax chargeable on the material used in the manufacture of such goods; or

    (v) any other tax chargeable on such goods, on payment of customs-duty equal to the aggregate amount of all such duties and taxes calculated at the rates prevailing at the time and place of importation of goods; or

    (c) in any other case, without payment of duty.

    Section 22A: Temporary export of imported plant and machinery

    Imported plant and machinery, temporarily exported that have not undergone any alteration, renovation, addition or refurbishment, may be re-imported duty free subject to the specific or general terms and conditions the Board may by the rules prescribe.

  • FBR explains treatment of duty, taxes on goods imported under foreign trade agreements

    FBR explains treatment of duty, taxes on goods imported under foreign trade agreements

    The Federal Board of Revenue (FBR) has provided comprehensive details regarding the taxes for goods imported under trade agreements with foreign countries.

    (more…)
  • FBR explains dutiable goods imported into Pakistan

    FBR explains dutiable goods imported into Pakistan

    KARACHI: Federal Board of Revenue (FBR) has defined dutiable goods imported into Pakistan under Customs Act, 1969.

    The FBR issued Customs Act, 1969 updated June 30, 2019 and explained goods dutiable under Section 118 of the Act.

    Section 18: Goods dutiable

    (1) Except as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the First Schedule or under any other law for the time being in force on,-

    (a) goods imported into Pakistan;

    (b) goods brought from any foreign country to any customs station, and without payment of duty there, transshipped or transported for, or thence carried to, and imported at any other customs-station; and

    (c) goods brought in bond from one customs station to another. 105(1A) Notwithstanding anything contained in sub-section (1), customs duties shall be levied at such rates on import of goods or class of goods as are prescribed in the Fifth Schedule, subject to such conditions, limitations and restrictions as prescribed therein.

    (2) No export duty shall be levied on the goods exported from Pakistan.

    (3) The Federal Government may, by notification in the official Gazette, levy, subject to such conditions, limitations or restrictions as it may deem fit to impose, a regulatory duty on all or any of the goods imported or exported, as specified in the First Schedule at a rate not exceeding one hundred per cent of the value of such goods as determined under section 25 or, as the case may be, section 25A.

    (4) The regulatory duty levied under sub-section (3) shall –

    (a) be in addition to any duty imposed under sub-section (1) or under any other law for the time being in force; and

    (b) be leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the issue of the official Gazette in which such notification appears is published at any time after that day.]

    (5) The Federal Government may, by notification in the official Gazette, levy an additional customs-duty on such imported goods as are specified in the First Schedule, at a rate not exceeding thirty-five per cent of value of such goods as determined under section 25 or, as the case may be, section 25A:

    Provided that the cumulative incidence of customs-duties leviable under sub-sections (1) and (5) shall not exceed the rates agreed to by the Government of Pakistan under multilateral trade agreements.

    (6) The additional customs-duty levied under sub-section (5) shall be,-

    (a) in addition to any duty imposed under sub-sections (1) and (3) or under any other law for the time being in force; and

    (b) leviable on and from the day specified in the notification issued under that sub-section, notwithstanding the fact that the official Gazette in which such notification appears is published at any time after that day.

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    FBR lists prohibited items for import, export

  • FBR lists prohibited items for import, export

    FBR lists prohibited items for import, export

    KARACHI: Federal Board of Revenue (FBR) has issued list of items that are prohibited for clearance of import or export under Customs Act, 1969.

    The FBR issued Customs Act, 1969 updated till June 30, 2019 (incorporating changes brought through Finance Act, 2019) and explained Section 15 related to prohibition.

    Section 15

    Prohibitions:- No goods specified in the following clauses shall be brought into or taken out of Pakistan, namely:-

    (a) counterfeit coins, forged or counterfeit currency notes, and any other counterfeit product;

    (b) any obscene book, pamphlet, paper, drawing, painting, representation, figure, photograph, film, or, article, video or audio recording, CDs or recording on any other media;

    (c) goods having applied thereto a counterfeit trade mark within the meaning of the Pakistan Penal Code, 1860 (Act XLV of 1860), or a false trade description within the meaning of the Copyright Ordinance, 1962 (XXXIV of 1962), the Registered Layout-Designs of Integrated Circuits Ordinance, 2000 (XLIX of 2000), the Registered Designs Ordinance, 2000 (XLV of 2000), the Patents Ordinance, 2000 (LXI of 2000), and the Trade Marks Ordinance, 2001 (XIX of 2001);

    (d) goods made or produced outside Pakistan and having applied thereto any name or trade mark, being or purporting to be the name or trade mark of any manufacturer, dealer or trader in Pakistan, unless,-

    (i) the name or trade mark is, as to every application thereof, accompanied by a definite indication of the goods having been made or produced in a place outside Pakistan; and

    (ii) the country in which that place is situated is in that indication shown in letters as large and conspicuous as any letter in the name or trade mark, and in the same language and character as the name or trade mark;

    (e) goods involving infringement of copyright, layout-design of integrated circuits, industrial designs, patents within the meaning of the Copyright Ordinance, 1962 (XXXIV of 1962), the Registered Designs Ordinance, 2000 (XLV of 2000), and the Patents Ordinance, 2000 (LXI of 2000), respectively; and

    (f) goods made or produced outside Pakistan and intended for sale, and having applied thereto, a design in which copyright exists under the Copyright Ordinance, 1962 (XXXIV of 1962), the Registered Layout –Designs of Integrated Circuits Ordinance, 2000 (XLV of 2000), the Patents Ordinance, 2000 (LXI of 2000), and the Trade Marks Ordinance, 2001 (XIX of 2001), in respect of the class to which the goods belong or any fraudulent or obvious imitation of such design, patent, copyright except when the application of such design has been made with the license or written consent of the registered proprietor, right holder of the design, patent or copyright, as the case may be:

    Provided that offences relating to goods imported or exported in violation of Intellectual Property Rights shall, notwithstanding any thing contained in any other law for the time being in force, be adjudicated under section 179 by the appropriate officer of customs.

    Section 16

    Power to prohibit or restrict importation and exportation of goods.- The Federal Government may, from time to time, by notification in the official Gazette, prohibit or restrict the bringing into or taking out of Pakistan of any goods of specified description by air, sea or land.

    Section 17

    Detention, seizure and confiscation of goods imported in violation of section 15 or section 16.- Where any goods are imported into, or attempted to be exported out of, Pakistan in violation of the provisions of section 15 or of a notification under section 16, such goods shall, without prejudice to any other penalty to which the offender may be liable under this Act or the rules made there under or any other law, be liable to detention, for seizure or confiscation subject to approval of an officer not below the rank of an Assistant Collector of Customs, and seizure for confiscation through adjudication, if required.

    It may be mention here that the ministry of commerce through SROs 927 and 928 dated August 9, 2019 imposed complete ban on trade with India.

  • FBR proposes retaining machinery for five years by EPZ investors for duty, tax free disposal

    FBR proposes retaining machinery for five years by EPZ investors for duty, tax free disposal

    KARACHI: Federal Board of Revenue (FBR) has proposed retaining period of machinery to five years imported by exporters for disposing of without duty and taxes.

    The FBR through SRO 805(I)/2019 proposed amendments to Customs Rules, 2001 and proposed to enhance the retaining period of machinery for manufacturers having facility within Export Processing Zones to five years in order to dispose of without duty and taxes.

    According to proposed amendments, the investors in EPZ shall retain machinery for a period of five years from the date of its import into the zone.

    Further the investors in EPZ shall be allowed to dispose of machinery in the tariff are after filing goods declaration subject to fulfillment of conditions of Import Policy Order upon payment of duty and taxes on the following terms, namely:

    01. If sold or otherwise disposed of before the expiration of three years from the date of import in EPZ, full duty and taxes would be applicable.

    02. If sold or otherwise disposed of after three and before four years from the date of import in EPZ, about 75 percent of duty and taxes would be applicable.

    03. If sold or otherwise disposed of after four and before five years from the date of import in EPZ, about 50 percent of duty and taxes would be applicable.

    04. If sold or otherwise disposed of after five years from the date of import of EPZ the exporter/investor would enjoy free of duty and taxes.

    The FBR also proposed amendment to the rules regarding licensing for operating a warehouse. As per the proposed amendments the documents and condition is as:

    “The site plan of the proposed warehouse indicating the location of the premises and the details of the total area, covered area and the area proposed to be utilized for the manufacturing area of facility and for storing and bonded warehoused input goods and manufactured goods therefrom for exports, and spate other storage areas for duty paid input goods, manufactured goods there from, factory rejects and wastages, for domestic local sales, in case of a manufacturing bond.

    Another amendment in this regard is as:

    “In case of manufacturing bond, the applicant shall apply to the Regulatory Authority designated by the Collector of Customs having jurisdiction in which the unit is registered under the Sales Tax Act, 1990, and in case there are more than one unit of a proprietor, he shall apply to the Regulatory Authority designated by the Collector of Customs where the head office of the applicant is registered under Sales Tax Act, 1990.”