ISLAMABAD: The Federal Board of Revenue (FBR) Tariff Classification Committee has determined that import of “4G MiFi modems and mobile WiFi modems” will attract customs duty of 11 percent.
The customs duty rates on import of ‘Modems’ were issued by the Customs Valuation Office (East), Karachi based on the findings of the Tariff Classification Board.
The Classification Committee concluded that “4G MiFi modems and mobile WiFi modems” are correctly classifiable under Pakistan Tariff (PCT) heading 8517.6220.
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The confusion arose due to a misinterpretation by the Central Customs Inspection Office, Lahore, which caused serious problems for importers due to illegal application of customs laws on the import of “Mobile WiFi Modems”.
Details on the matter state that the Central Customs Inspection Office, Lahore, has referred the issue of classification of “Wi-Fi/Mi-Fi devices” to the Classification Committee for determination of appropriate classification as per Pakistan Customs.
The simple facts as reported by the reference bureau are that the Central Customs Inspection Bureau, Lahore, when it scrutinised the customs data for 2015-2017 of imports by various telecom companies from MCC (Preventive/Certificate), Lahore, it found that Wi-Fi/Mi-Fi modems were wrongly classified under PCT heading 8517.6220 instead of “Subscriber End Equipment” which is the actual PCT heading 8517.6940.
As a result, an audit observation was issued against the importer following which a violation report was sent to the Collector of Customs (Adjudication), Lahore under Section 179 of the Customs Act, 1969 vide SRO 886(1)/2012 dated 18.07.2012.
The Adjudicating Authority issued a show cause notice and passed Original Order No. 27/2018 in favour of the Authority.
The issue was taken up by the Court of Customs Appeals, which referred the case to the Tariff Classification Board.
After carefully considering the arguments put forward by both the importer and the authorities and thoroughly examining the relevant provisions of the Pakistan Customs Act (PCT) and General Interpretation Rules (GRI), the Classification Committee determined that the appropriate classification for “4G MiFi modems and Mobile WiFi modems” is PCT heading 8517.6220, which specifically covers devices designed to perform the functions of receiving, converting and transmitting or reproducing data, which are the core functions of the operation of the Wi-Fi/Mi-Fi modems in question.
Furthermore, in its clarification, the Pakistan Telecommunications Authority (PTA) emphasized that the term “Subscriber End Equipment” is broad and applicable to a wide range of end-user devices, regardless of their specific functionality. This broad classification does not match the precise and specific functionality of Wi-Fi/Mi-Fi modems, which are primarily concerned with processing and transmitting data.
This classification is further strengthened by the principles of GRI 1 and 3(4), which stipulate that goods should be classified based on specific descriptions rather than more general descriptions. In this case, the function-based description in PCT heading 8517.6220 is more precise and specific compared to the broader and less well-defined category of “subscriber-end equipment.”
Therefore, the Tariff Classification Board concluded that “4G MiFi modems and mobile WiFi modems” are correctly classifiable under PCT heading 8517.6220, the Tariff Classification Board added.
Copyright Business Recorder, 2024
