KARACHI: The Federal Board of Revenue (FBR) has issued new customs values for imported diesel engines used in generators to address concerns regarding under-invoicing and ensure uniform assessment of duties and taxes.
The Directorate General of Customs Valuation, an arm of the FBR, issued Valuation Ruling No. 2088/2026 for the determination of customs values of diesel engines for generators under Section 25A of the Customs Act, 1969.
According to the directorate, the exercise was initiated following a representation submitted by Imperial Electric Company (Pvt) Ltd (IEC), which highlighted the absence of a specific valuation ruling for diesel engines used in generators and raised concerns about widespread under-invoicing of these imports.
The customs valuation authorities stated that a preliminary assessment of import data, including declared values, assessed values and prevailing market prices, was conducted to determine appropriate customs values for the subject goods.
Stakeholder consultations held
The Directorate General of Customs Valuation said that meetings were convened with relevant stakeholders to determine the customs values.
During these consultations, participants were invited to present their viewpoints and submit documentary evidence supporting their declared import values and market assessments.
The directorate noted that stakeholders’ submissions were thoroughly examined before finalising the valuation exercise.
Analysis based on import data and market inquiries
For determining customs values, the directorate reviewed import data covering the preceding 90 days. The analysis included scrutiny of declared values, assessed values and other relevant information received from stakeholders.
Additionally, market inquiries were conducted in accordance with sub-section (7) of Section 25 of the Customs Act, 1969, and the Directorate’s Office Order No. 17/2014 dated March 19, 2014.
The findings from these inquiries were incorporated into the valuation process to establish fair customs values reflecting prevailing market conditions.
Higher declared values to prevail
The FBR clarified that where the declared value or invoice value of imported diesel engines exceeds the customs values specified in Valuation Ruling No. 2088/2026, assessments will be made on the higher value in accordance with sub-section (1) of Section 25 of the Customs Act, 1969.
The ruling also provides guidance for air-freighted consignments, stating that the difference between air freight and sea freight charges will be added while determining the assessable customs value.
The new customs values are expected to enhance transparency in import assessments, reduce the risk of revenue leakage through under-invoicing, and ensure a level playing field for importers of diesel engines used in generator sets.
