RECORDER REPORT

ISLAMABAD: Directorate General of Customs Valuation Karachi has revised customs values on the import of different kinds of olive oils including pure olive oil.

According to a new ruling issued by the directorate, in exercise or the powers conferred under Section 25-A of the Customs Act 1969, customs values of Olive Oil are determined.

The new Ruling has superseded Valuation Ruling No.288/2010 dated 30-12-2010.

The Customs Values of Olive Oil had been determined under section 25-A of the Customs Act 1969 vide Valuation Ruling no, 288/2010 dated December 30, 2010. Numerous representations have been received in the Directorate to revise the values keeping in view decreasing trends in the international market, therefore, the issue was taken up for redetermination or customs values.

Meetings were held on 19-08-2016 and 22-09-2016, with all the stakeholders of' subject goods and representatives of clearance Collectorate who participated in the meetings. All the stakeholders strongly contended and requested that the said valuation Ruling may be reviewed in the light of prevailing international market prices. This trend needs to be revised downward, otherwise these products will find their way into market through illegal routes and under the garb of various cargoes. This will create a grey area which will adversely affect the bona-lick trade of the country. Therefore, valuation ruling price may be revised to save the commercial genuine importers. It was also highlighted that the subject goods are perishable items and therefore have got limited shelf life, consequently, near the expiry dates, these perishable items are sold on sale and discounted prices. It was further contended by the traders that since the subject goods are mainly being sold on super and general stores, therefore, a lot more expenses (shelf rent, marketing expenses etc) are contributed at retail level which cannot be managed without adding extra value to the subject goods. The importers contended that all these factors may also be considered in fixing value of subject goods.

Valuation methods provided in Section 25 of the Customs Act 1969 were duly followed and applied sequentially to address the valuation issue at hand. Transaction value method provided in Sub-Section (I) or Section 25 was found inapplicable because it is generally known to all that majority or 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) or Section 25 ibid were examined for applicability to determine Customs value of subject goods, this data provided some reference, 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 same 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 round that the determination of Customs value could not be based solely upon this method either. Therefore, valuation method provided vide section 25 (8) or Customs Act 1969, could not be applied as the conversion cost from constituent materials and allied expenses, at country of export were not available. Finally, Pral database, market information and international prices through Web were examined thoroughly. All the information so gathered was analyzed for determination of' Customs Value of the subject good. Consequently, the Fall Back Method as provided under section 25(9) of the Customs Act, 1969 was applied to arrive at assessable customs values of Olive Oil.

In cases where declared/ transaction values are higher than the Customs values determined in this Ruling, the assessing officers shall apply those values in terms of Sub-Section (1) of Section 25 of the Customs Act, I969. In case of consignments imported by air the assessing officer shall take into account the differential between air freight and sea freight while applying the Customs values determined in this Ruling. The Custom values determined in the Valuation Ruling are for the descriptions and specifications as mentioned herein. HS Codes are mentioned for illustrative purposes so that Valuation Ruling values are made accessible to the

Assessing officers. The assessment shall be finalized in the correct classifications after fulfilling request formalities relating to importability or other certifications required thereon.

The values determined vide this Ruling shall be the applicable Customs value for assessment of subject imported goods until and unless it is rescinded or revised by the competent authority in terms or Sub-Sections (I) or (3) of Section 25-A of the Customs Act, 1969.