The Tariff Classification Committee of the Federal Board of Revenue (FBR) has decided to apply customs duty of 11% on import of “4G MiFi modems and Mobile WiFi modems”. The decision was taken based on the findings of the Tariff Classification Committee.
The Classification Committee concluded that “4G MiFi modems and mobile WiFi modems” should be correctly classified under Pakistan Tariff (PCT) heading 8517.6220.
The decision puts an end to an earlier confusion where the Central Customs Inspection Office, Lahore, had wrongly applied customs laws on the import of “Mobile WiFi Modems”, causing severe problems for importers.
The Central Customs Inspection Office, Lahore, has referred the issue of classification of “Wi-Fi/Mi-Fi devices” to the Classification Committee to determine the appropriate classification under the Pakistan Customs Act.
The Central Customs Inspection Office, Lahore, reviewed the import data of various telecommunication companies from 2015 to 2017. It found that “Wi-Fi/Mi-Fi modems” were misclassified under Pakistan Customs (PCT) heading 8517.6220 instead of the correct heading 8517.6940, where they are classified as “Subscriber Terminal Equipment”.
Based on the findings, the department issued an audit finding against the importer, following which the department submitted a violation report under Section 179 of the Customs Act, 1969 and SRO 886(1)/2012 to the Collector of Customs (Adjudicating Officer), Lahore.
The adjudicating authority thereafter issued a show cause notice and passed an order in favour of the department (Customs authorities).
The importer appealed the matter to the Customs Appeals Court, which referred the matter to the Tariff Classification Board to determine the proper classification.
The Pakistan Telecommunications Authority (PTA) noted that the term “Subscriber End Equipment” is broad and can encompass a wide range of end-user devices, regardless of their specific functionality. This broad classification does not accurately reflect the precise and specific functionality of Wi-Fi/Mi-Fi modems, which are primarily concerned with processing and transmitting data.
The Classification Board’s decision is further supported by the principles of the General Rules for the Interpretation of the Harmonized System (GRI 1 and 3(4)). These principles stipulate that goods should be classified based on a specific description rather than a more general description. 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 properly classifiable under PCT heading 8517.6220.
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