GOVERNMENT OF PAKISTAN
DIRECTORATE GENERAL CUSTOMS VALUATION
CUSTOM HOUSE, KARACHI.
C.No. Misc/I5/2009- (Law) Karachi, 14th October 2009
The Collector of Customs,
Model Customs Collectorate,
Moghalpura Dryport,Lahore.
SUB: INCLUSION OF WEIGHT OF RETAIL PACKING IN ASSESSABLE VALUE OF ITEMS BEING ASSESSED ON WEIGHT BASIS
Please refer to your letter C.No.V-Cus/CFS/Misc/Exam/104/2008 dated 25-02- 2009 and 18-9-2009 on the above cited subject.
2. The Collectorate’s assertion that the weight of retail packing of biscuits, coffee, cereals, shampoo, perfumes, eaudetoilette, milk, butter, chocolates, chips, toys and auto parts etc should be included in the assessable value has been examined within the perspective of existing laws. The customs value as defined under section 25(1) of the Customs Act, 1969 refers to the price paid or payable for the imported goods. In this regard, law requires that the entire charges/cost incidental to the transaction has to be taken into account to arrive at the correct customs value. Therefore, whether the net weight of the goods being valued includes the total incurred cost or not has been the disputed issue in the matter.
3. The provisions of section 25 (2) (b) (ii) & (iii) envisage that the cost of container and the cost of packing, for labour or materials, shall be added to the Customs value. Furthermore, final determination of customs value decided under section 25A of the Customs Act 1969 should invariably cover all the elements and expenses relating to the imported goods. Hence, the value of the contents of transacted goods, wrapped in a paper, box, carton or a tin, does actually represent its total cost. However, the mode of packing, essential and non-essential, needs to be analyzed for differentiation between ‘gross weight’ and ‘net weight’ of various retail-packing goods. The gross weight of a consignment as indicated in the bill of lading or the packing list represents the total weight of a consignment which includes non-essential i.e. wooden boxes, air/sea-worthy packing material as well as essential packing i.e. individual box/container of goods without which goods cannot be sold in the retail market. The essential packing of individual item can never be separated from inclusion to arrive at assessable value in the light of section 25(2)(b)(ii)&(iii). The items of import as mentioned in the Collectorate’s referred letter have been observed to be those articles which are valued in their individual capacity being a finished commodity for retail sale/marketing. These items of import carry their unique and exclusive singular packing material which is with the product until its utilization by the consumer.
4. The appraisal of assessable value, inclusive of weight of essential packing as mentioned above, by the Collectorate is therefore legally correct and sustainable. The inclusion of retail packing in the net weight of imported goods for determination of CIF value and assessment of duty and taxes be considered by all the field Collectorates for uniformity of assessment and also need to be duly incorporated in the Valuation Rulings issued in respect of aforesaid items under section 25A of the Customs Act 1969.
Signed by
(Amir M. Khan Marwat)
Director General