FBR Reports 20.57-Hour Average Customs Clearance Time

ISLAMABAD: The Federal Board of Revenue (FBR) has reaffirmed its commitment to expanding Faceless Customs Assessment (FCA), stating that the relocation of the Central Appraising Unit (CAU) to Islamabad is a permanent step in customs modernisation and will not be reversed.

Responding to concerns raised by the All Pakistan Textile Mills Association (APTMA) over clearance delays, valuation disputes and laboratory referrals, the FBR said the performance figures cited by the association largely reflected the initial months of implementation and did not account for subsequent improvements.

According to the tax authority, average customs clearance time has fallen from 40.2 hours to 20.57 hours, while 83% of consignments are now cleared within 48 hours. The FBR said it would address genuine operational problems without undermining the reform's core objectives.

The initiative aims to reduce discretionary powers, limit direct interaction between taxpayers and tax officials, and ensure transparent, system-based assessment decisions. The FBR clarified that only the assessment function is being relocated to Islamabad, while other customs functions will remain with the relevant collectorates.

Physical examinations and port operations will continue in Karachi, and traders can approach their respective Karachi collectorates to resolve operational issues.

To improve clearance efficiency, the FBR plans to introduce targeted measures, including dedicated arrangements to clear backlogs involving the Export Facilitation Scheme (EFS) and export-oriented consignments. Green-channel facilities will also be extended to Authorised Economic Operators and compliant importers.

The proposed service timelines include 24 hours for assessment and the first review, 48 hours for the second review, 24 hours for examination after grounding, and 72 hours for laboratory results. Automatic escalation mechanisms will support these timelines. Provisional release under Section 81 of the Customs Act, 1969, will also be facilitated wherever legally permissible.

The FBR further clarified that customs valuation remains governed by Section 25 of the Customs Act, 1969. Digital assessment does not permit arbitrary increases in declared values, and customs officers must follow prescribed valuation methods and record reasons wherever required.

Electronic documentation, consultation with specialists and digital coordination are expected to improve assessment quality while reducing unnecessary direct interactions between traders and officials.

The FBR has invited APTMA and other trade organisations to submit specific, verifiable cases involving delays, valuation disputes or classification errors, along with relevant Goods Declaration numbers, so the reported problems can be investigated and resolved.

The tax authority reiterated that operational shortcomings would be addressed through targeted improvements while preserving the integrity of Faceless Customs Assessment and its wider goals of transparency, accountability and efficiency.

The FBR has also urged trade bodies to educate their members about filing Goods Declarations before vessels arrive. Advance filing and pre-arrival processing can allow eligible consignments to be assessed and cleared sooner, reducing port dwell time and unnecessary demurrage expenses.

The customs reform forms part of the FBR's broader digital transformation programme, which includes the Digital Invoicing System and AI-based Digital Production Monitoring. These initiatives aim to strengthen transaction documentation, improve visibility into industrial production and tax records, and curb tax evasion, concealment of economic activity and unfair competition.

According to the FBR, digitalisation is intended to protect compliant businesses by making tax compliance more transparent and reducing opportunities for preferential treatment through personal influence.

International examples also support the shift towards technology-driven customs administration. India's faceless assessment model, Singapore's TradeNet and Dubai Smart Customs demonstrate how digital systems can facilitate trade while strengthening transparency and accountability.

The underlying principle of the reform is to ensure that customs decisions are based on law, evidence and established procedures rather than personal connections or physical proximity to officials.