The National Board of Revenue has set uniform minimum import value of more than 700 products of all countries for customs assessment scrapping the country-specific and region-based minimum value system.
The NBR has also increased the minimum value for most of these products from that of the previous year to ensure proper revenue collection from import of the products and prevent duty evasion through misdeclaration.
The customs wing of NBR on June 30 issued a statutory regulatory order in this connection following reservation expressed by many exporting countries, mainly from European Union, on the country and region specific minimum value system.
Under the previous system, the minimum value of each product originating from EU, USA and other developed countries was set at a higher level than that of other countries including China, India and other Asian countries.
Under the new system, the minimum value of a product from the list will be same for all countries.
The value will be comparatively higher for a number of products, mainly clothes and footwear, of renowned brands than that of general brands.
Officials said that NBR increased the minimum value for more than 60 per cent of the products to compensate revenue losses due to introduction of country-neutral minimum value system.
For example, in new system minimum value for water including mineral water has been set at $1 a litre for all countries. Earlier, minimum value for the product was $0.70 for Asia origin and $1 for other regions.
Importers will not be able to declare the value of the products below the minimum value set by the NBR.
The products under the minimum value system contribute around 50 per cent of total customs duty collected in the country.
In the new list, NBR increased the minimum value of fish, sugar confectionary, sweet biscuits, energy drink, beauty products for male and female, toothpaste, mosquito coil, plastic, copper, aluminium, steel, milk powder, fabrics, blanket, footwear, ceramic floors, wall tiles, sanitary ware, split-system air conditioning machine, parts, indoor unit, battery charger, home appliances including food grinder and mixture, cookers, coffee and tea maker, automatic circuit breaker, switch socket parts, base oil, lubricating oil, bank card, fabrics, clothes, bicycle and bicycle parts, sofa and other furniture, parts of furniture and toys, among others.
In the SRO, NBR instructed its field-level customs officials to consider the minimum value for customs assessment.
Customs officials, however, will also be able to set customs assessment value at higher than the minimum value considering the source of product, brand and model, it said.
NBR sets the minimum import value to prevent duty evasion through declaring lower prices of imported products, known as under-invoicing, by importers though there is a bar from World Customs Organisation to set the minimum value for customs assessment.
Customs valuation should be done based on transaction value of products, according to the WTO.
Many importers, mainly multinational companies, have also been opposing the system and demanding customs valuation based on transaction values.
Trade experts also suggest NBR to scrape the system and follow WTO transaction-based valuation method as a preparation for post LDC period.
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