Pakistan’s Tariff structure prescribes variety of treatments to various import and export goods. There are too many tariff regimes, ranging from zero to no concession. While most of the imported materials enjoy zero customs duty, a few imported finished goods attract maximum rates of customs duty. Moreover, imports from different countries also attracts different rates of customs duty, such as imports originating from countries with whom Pakistan has entered into some preferential trade agreement (PTA or FTA) and imports originating from other countries. Similarly, exports from Pakistan, besides attracting different tax/duty regime at home and given different duty drawback (refund) incentives, have to face various customs duty rates at various destinations(countries). Therefore, customs tariff on imports and exports is a bit complex matter which usually becomes a hurdle in entering into international business by prospective importers/exporters.
Once you express your intent to us to do international trade, you will feel relaxed as all the tariff related matters will be handled by us in your best interest. We will advise you the most economical way to import and the most beneficial way to export. Our services in this regard are briefly spelled out in the following paragraphs:
Pakistan’s Customs Tariff
Goods imported in and exported from Pakistan are solely governed under the Pakistan’s Customs Tariffs. Our firm assists importers, exporters, clearing agents and entrepreneurs to comply with customs law, other trade laws and respective regulations in every set of circumstances, avail maximum concessions where incentives available, and comply with all the legal requirements to avoid any penal action.
Assessment of Customs value of goods is an important component for the determination of leviable amount of Customs duty and other taxes. The value of goods imported into Pakistan for customs purposes is determined via following methods: transaction value, transaction value of identical goods, transaction value of similar goods, deductive value, computed value, valuation if other values cannot be determined (fall back method).
Valuation disputes are quite frequent as the Customs authorities usually challenge the values declared by importers. Proper customs classification and valuation planning can result in substantial duty savings and avoidance of penalties and demurrage charges. Our firm can help in smooth processing of your import operations by logically tackling valuation issues, adopting the optimal methodology for valuing imported good in specific transactions and thus protecting your interest from any likely valuation dispute.
Classification of Tariffs
There are numerous tariff classifications; duty rates vary widely depending on how goods are classified. While many products can be readily classified, whereas, there is often an overlap between or among different tariff provisions, where two or more classifications appear applicable. Assuring the proper tariff classification enables importers to properly price out their goods and avoid risk of unexpected duty assessments. For accurately classifying tariffs, you can avail our service. We will review your company’s product line, diagnose the existence of any tariff classification issues and identify the most favorable tariff classification and duty rate.
Duty Drawback is a privilege that provides refunds of duty paid on imported inputs used in domestic manufacturing of value-added goods which are exported and for goods imported for re-export. Our firm advises on admissibility of duty drawback under the given scheme and assists in preparation and submission of declaration on the behalf of its clients at the relevant forum.
The Customs provides for availing the warehousing facility. The importers, after getting license from Customs, can deposit dutiable goods for a certain time in the public warehouse without payment of duties. We assist importers/manufacturers in filing application for the license of the public warehouse in such form as prescribed by the Customs.
Manufacturing Bonded Warehouse License
The Customs may, on the application of an importer of dutiable goods/raw materials, who intended to use the raw materials in the manufacture of goods “which are wholly meant for export” and makes a declaration to that effect, allow the importer to clear the raw materials, without payment of duty, under bond to a factory warehouse or private warehouse licensed under the Customs Act. We assist importer/manufacturers in filing of application for the manufacturing bonded warehouse license private warehouse license.
Free Trade Agreements (FTAs)/Preferential Trade Agreements (PTAs)
Under these trade agreements either duty free import/export or import/export at reduced duty rate is allowed to be made between the trading countries. These agreements have a major impact on trade and investment worldwide. In fact, they are responsible for shaping business relationships among companies across the globe. Pakistan already have some FTAs/PTAs with different countries. Beside existing FTAS/PTAs, Government of Pakistan is presently negotiating new trade agreements and some are also in pipeline.
In order to succeed in the international environment, exporters/domestic industry need to be aware of the impact of existing trade agreements on their businesses and should know about their proactive role to play when new FTAs/PTAs are taking shape so that the under-negotiation FTAs/PTAs would create opportunity for expanding their business thus increasing profitability.
Our firm assists its clients in presenting their view point and input at appropriate government forum at the time of negotiation of FTAs/PTAs and preparation of request and offer lists of goods for concessional duty rates and protective tariff rates, as the case may be.
Export Trade Advisory and DTRE Scheme
Exporters frequently face difficulties in availing benefits of various export schemes. Our firm maintains updated information of such concessions and procedures available under various schemes. We assess the nature of client’s business models to advise them if any concessions are available to them under such schemes such as: Refund or rebate on exports to specific countries like Afghanistan, Duty and Tax Remission on Export (DTRE), Export Oriented Unit Facility and GSP+ Scheme.
DTRE scheme allows local manufacturers to procure imported and local inputs/raw materials without payment of customs duty, excise duty, sales tax and withholding tax for the goods which are meant for export. We assist our clients in preparation and filling of DTRE application with Regulatory Collector, getting Certificate of Import Authorization from Input Output Co-Efficient Organization (IOCO) and getting the approval of DTRE application from the Collector.
Enlistment in the Customs General Order (CGO)
For facilitating and protecting the domestic industry, Government of Pakistan deny the exemptions / concessions on imported products which are manufactured locally and enlisted in the Customs General Order (CGO) list. The CGO list is updated intermittently by Engineering Development Board (EDB) and the products enlisted are notified to Federal Board of Revenue (FBR) for disallowing concessions from custom duties and taxes under different notifications / orders. EDB has prescribed an elaborate procedure, a standard format of application and required supporting data/information, to satisfy itself that the applicant industry has the capacity to produce the specified quality product to meet the market demand. For availing the protection and level playing field against competition posed by the imported products, the domestic producers can file application for the enlistment of their products in the CGO.
We assist our clients in filling the relevant information in accordance with prescribed format, filing the application, representing them at EDB, responding the queries in the befitting manner and follow up their cases till enlistment of their products in the CGO.