LAHORE: Pakistan Customs has revised the valuation mechanism for imported carbon steel seamless pipes, linking customs assessments to London Metal Exchange (LME) steel billet prices, fabrication costs and freight charges, with separate formulas for imports from China and other countries.
According to Valuation Ruling No. 69/2026, the Directorate General of Customs Valuation has introduced a revised cost-based assessment mechanism for carbon steel seamless pipes of assorted sizes under Section 25A of the Customs Act, 1969. The new ruling supersedes Valuation Ruling No. 68/2026, issued on June 12, 2026, following objections raised by three domestic manufacturers.
Huffaz Seamless Pipe Industries Limited, Peoples Steel Mills Limited and Jamal Seamless Pipe (Pvt) Limited had challenged the earlier ruling under Section 25D of the Customs Act.
Following their petitions, the Director General of Customs Valuation issued Order-in-Revision No. 41/2026 on August 31, 2026, directing the Directorate to undertake a fresh valuation exercise using the computed-value method under Section 25(8).
Under the revised mechanism, customs values for Chinese-origin carbon steel seamless pipes will be calculated using the LME domestic ex-works steel billet price, with an additional 2% of that price for general expenses, $50 per tonne for the square-billet differential, $300 per tonne for fabrication and actual freight charges.
For imports originating from countries other than China, the customs value will be calculated using the LME export price of steel billets, with an additional $50 per tonne for the square-billet differential, $300 per tonne for fabrication and actual freight.
Both categories fall under Pakistan Customs Tariff (PCT) code 7304.3900, while separate proposed WeBOC classifications have been specified for Chinese and other imports.
The Directorate said the revised values were determined following a stakeholder meeting held on October 5, 2026, in compliance with the Director General’s revision order.
During the consultation, local manufacturers argued that the London Metal Bulletin/Fastmarkets benchmark previously used for Chinese-origin square billets was outdated and inappropriate because it represented an import price rather than an export price.
They maintained that the benchmark had not been updated since March 2024 and therefore did not reflect prevailing international market conditions.
The manufacturers proposed using China’s domestic ex-works steel billet prices in the absence of an export benchmark and argued that 13% value-added tax should be included when calculating the Chinese export free-on-board price.
They also maintained that round-bar feedstock was approximately 180–200 per tonne more expensive than LME square billets.
On fabrication costs, local manufacturers proposed an allowance of approximately $350 per tonne for converting round bars into seamless pipes and recommended using a fixed freight value instead of actual freight.
Importers, however, argued that fabrication costs should not exceed $250 per tonne and maintained that China’s domestic ex-works prices already included 13% value-added tax.
Following the consultation, Customs adopted a fabrication cost of $300 per tonne, between the amounts proposed by manufacturers and importers, while retaining actual freight charges in the valuation formula.
The Directorate said the revised values were calculated using five verifiable cost components: the LME billet price, square-billet differential, fabrication cost, freight and miscellaneous expenses.
It also examined import data for round billets and bars used by domestic manufacturers, alongside import records for finished seamless pipes brought in by commercial importers.
The Directorate stated that the transaction value method under Section 25(1) could not be adopted because declared import values did not correspond to prevailing market prices.
Methods based on identical and similar goods were also considered unsuitable for exclusive reliance because sufficient evidence regarding product quality, quantities and commercial levels was unavailable.
Market inquiries under Section 25(7) were conducted but did not produce meaningful results because prices varied significantly.
Consequently, the Directorate applied the computed-value method under Section 25(8), using LME price references, fabrication costs and freight to determine the revised customs values.
Under the ruling, where declared transaction values or invoice values exceed the customs values calculated through the prescribed formulas, duties and taxes will be assessed on the higher amounts.
The ruling applies to the specified descriptions and specifications of carbon steel seamless pipes, while the HS codes are provided for illustrative purposes.
