Valuation Ruling No. 1834/2023 is the new regulation that the directorate has published to replace the old one that was released nine months ago.
This decision, which is based on Section 25-A of the Customs Act, 1969, particularly relates to the evaluation of the worth of cell phones.
The official paper states that in order to determine the true costs of mobile phone devices, a comprehensive analysis of multiple markets was conducted.
Based on the data and information gathered during this exercise, the values of these products have been recalculated in accordance with sub-Section (7) of Section 25 of the Customs Act, 1969.
One significant modification to the new valuation is that Pakistanis living abroad can now take advantage of a depreciation of up to 60% on reconditioned or used cell phones.
This basically means that because these phones are refurbished or worn, their value will be deemed to have dropped by 60% when determining customs charges.
Additionally, the customs values of reconditioned or used cell phones that are imported by “bonafide passengers” will be determined using tabular values that account for depreciation.
It is noteworthy that the directorate has stated that the updated customs valuation does not expand its provisions to include importers of mobile phones.
This suggests that individual users or “bonafide passengers” importing reconditioned or used mobile phones are the main beneficiaries of the valuation adjustments, which grant them special allowances for depreciation in customs assessments.
Regarding the news article that appeared in a segment of the press, the Federal Board of Revenue (FBR) has provided an explanation. FBR has explained that sales tax and income tax at the import stage have been significantly lowered in the case of smart phones of Rs. 15,000 or less in accordance with the government’s Digital Pakistan Initiative.
However, the Pakistani government is aware that, in order to give local manufacturers a fair shot at the market and to promote local production of smartphones in Pakistan, they may want some protection.
A committee headed by Mr. Abdul Razak Dawood, Advisor for Commerce, Textile, Industry & Productions and Investment, is currently working on this. The Economic Coordination Committee (ECC) will make the final decision in this regard after conferring with all relevant parties
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