FBR bars commercial importers goods from clearance

ISLAMABAD (March 16 2009): The Federal Board of Revenue (FBR) has barred commercial importers of miscellaneous goods from clearance of their consignments under Pakistan Customs Computerised System (PACCS), thus excluding commercial imports from the purview of computerised clearance system.

The containers having miscellaneous goods are highly prone to misdeclaration due to combination of multiple items in one container. In case of miscellaneous containers, this area has remained always problematic for the customs officials. As miscellaneous containers include a variety of goods, it is very easy to misdeclare imported consignments.

Resultantly, the PACCS authorities would cancel the “user identification numbers” allocated to the commercial importers of miscellaneous goods. The decision would ensure speedy clearance of consignments under the computerised system by the organised and well documented entities only.

In another major development, it has also been decided that customs officials would randomly check imported consignments cleared through Green Channel facility on regular basis to ensure monitoring of the consignments. Chief Collector of Customs (South) would monitor the consignments cleared under the Green Channel on random basis.

Sources told Business Recorder on Sunday that FBR has taken some important decisions to check misuse of PACCS and under-invoicing of imported consignments. In this regard, the FBR had recently convened a meeting, chaired by FBR Chairman. The meeting was attended by Member Customs FBR; Chief Collector (South), Karachi; Collector, MCC (Appraisement), Karachi and Collector, MCC (PACCS), Karachi.

According to sources, the meeting discussed that the clearance from PACCS may only be confined to imports by industrial importers, multinationals, diplomats, UN, and government imports. The commercial importers may not be allowed to clear their goods from PACCS, and their IDs may be cancelled.

It has also been agreed that Collector PACCS may thoroughly shake the registered IDs for cleansing the data and allocation of new IDs.

The issue of under-invoicing was thoroughly discussed in the meeting. It was brought to the notice of FBR that commercial imports for UAE, Thailand, Singapore and China may be scrutinised in red lane by the Collectorates other than PACCS.

The Chief Collector (South), Karachi had to demonstrate the weights of existing Risk Management Criteria and explain their operations. The Committee of Risk Management Unit (RMU) needs to be made operational and a weekly report to the Board in this regard may be sent by the end of every week.

The absence of an effective Risk Management System (RMS) for clearance of imported consignments at the PACCS is causing revenue loss to the national exchequer. The FBR had already directed the customs authorities to immediately take all administrative steps to control leakage of revenue through clearance systems. Keeping in view these aspects and analysis of PACCS data, it has been decided that commercial imports pertaining to miscellaneous goods will be taken out of the purview of PACCS clearance. It was also decided that out of charge in the PACCS will be done at the level of Principal Appraiser (PA) in consonance with the practice prevailing in other Collectorates. First review will be done by AC/DC and the second review by the ADC.

Moreover, the Collector will make random checks, on regular basis, for the goods being cleared in the green channel. The Chief Collector will also randomly check the consignments being cleared in the green channel. However, Chief Collector will not involve himself in the operational matters and micro management of the Collectorate work. The micro management will be left to the Collector.

Sources said that the user ID for commercial imports will not be issued by other Collectorates and this will be exclusive job of PACCS Collectorate. However, the requests for issuance of “user ID for industrial importers” will be processed by other Collectorates, but “user ID” will be allowed subject to clearance by PACCS Collectorate.

When contacted, experts in customs matters told this scribe that the FBR has done an excellent job by imposing ban on clearance of miscellaneous goods imported by the commercial importers. On the other hand, they criticised the FBR decision regarding restriction on the Chief Collector of Customs for not involvement in the operational matters.

They quoted the Customs General Order (CGO) 15 of 2007 on the powers, functions and jurisdiction of the Chief Collectors of Customs. The CGO says, “the main objective for the appointment of Chief Collectors is to provide senior level operational heads in the field so that day to day operational issues faced by the Collectorates and by the clients of the Customs department are addressed to and resolved expeditiously, enabling the Board to concentrate on Policy development and formulation”.

However, the decision on PACCS related issues meeting says, “However, Chief Collector will not involve himself in the operational matters and micro management of the Collectorate work”.

Experts claimed that the CGO and the PACCS decision seemed to be clashing with each other. It is evident from the CGO that Chief Collector is the operational head of the respective region. On the other hand, PACCS meeting clearly indicates that Chief Collector will not involve himself in the operational matters.

It is yet to be seen whether the powers of the Chief Collector of Customs have been curtailed on the PACCS related issues, or he would continue to remain operational head of the respective region. A comparison of CGO and the meeting decision reflects that the Chief Collector would not be involved himself in the operational matters pertaining to PACCS, experts added.

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