KARACHI: The Directorate General of Customs Valuation has revised the customs values of whey powder (H.S.Code:0404.1010) vide Valuation Ruling No 1217/2017 under Section 25-A of the Customs Act, 1969.
Customs values of whey powder were earlier determined through Valuation Ruling No.789/2016 dated 08.01.2016. There was representation from the Head of Economics Department, Embassy of France through the Federal Board of Revenue Islamabad for re-determination of customs values of whey powder afresh.
They claimed that the prices of whey powder of France origin are lower in the international markets than the customs value determined in the existing valuation ruling, which is over one year old, hence it is required to be revised in the light of Sindh High Court, at Karachi’s orders dated 10.11.2015. Since 90 days have passed and representation is received regarding values determined in the valuation ruling dated 08.01.2016, hence an exercise was initiated to re-determine the values of the subject items.
Meeting was held on 09-10-2017 with the stakeholders to discuss the current international market prices of the subject goods. All the commercial importers requested that the said valuation ruling may be reviewed in the light of prevailing international market prices. They contended that the Customs Values determined in the valuation ruling dated 08-01-2016 are required to be revised downward.
Valuation methods provided in Section 25 of the Customs Act, 1969 were duly applied in their regular sequential order to address the particular valuation issued at hand. The transaction value method provided in Sub-Section (1) of Section 25, was found inapplicable because it is generally known to all that majority of invoices produced at import stage are manipulated/fabricated and hence the requisite information required under the law was not available to arrive at the correct transaction value. Identical / similar goods value method provided in Sub-Sections (5) & (6) of Section 25 ibid were examined for applicability to determine Customs value of subject goods, this data provided some references, however, it was found that the same cannot be solely relied upon due to the absence of absolute demonstrable evidence of qualities, and quantities of commercial level etc., and also it was observed that some importers provide misleading description while declaring goods, as other types and varieties of similar goods to avoid the application of valuation ruling. Information available was, hence, found inappropriate.
In line with the statutory sequential order of Section 25, this office then conducted a market inquiry using deductive value method under Sub-Section (7) of the Section 25 of the Customs Act, 1969. However, it was found that the determination of Customs values could not be based solely upon this method either. Therefore, valuation method provided vide Section 25 (8) of Customs Act 1969, could not be applied as the conversion cost from constituent materials and allied expenses, at country of export were are not available.
