The Customs Intelligence and Investigation Directorate (CIID) warned of an increase in false declarations due to an order of the National Board of Revenue on the assessment of duty of imported packaged goods like cosmetics and perfumes.

The NBR at the end of last year directed field offices of customs to calculate the duty of imported items by adding the duty for the containers if the cost of the packing materials, for example bottles or containers, is not included in the import prices.

For ease of valuation, the revenue collector said duty could be calculated by determining the prices of the packaging materials based on weight per kilogramme.

The CIID said customs stations were assessing duties differently from one another as the directive has created ambiguity in the field offices. 

As a result of the order, various interpretations and practices in duty assessment of products has emerged among customs offices, said the CIID in a letter to the NBR chairman earlier this week.

The letter, signed by CIID Director General Moinul Khan, said duties were calculated by taking the gross weight of imported goods as net weight.

On the other hand, some officials are determining customs duties by adding prices of packing materials separately to the value of the goods assessed based on net weight, it added.

“This discrepancy is not consistent with the international best practices,” said the CIID, urging the NBR to suspend the order immediately.

It suggested that the authority hold a session with the participation of former top officials of the NBR and stakeholders to take a decision in this regard.

The findings came amid concerns among importers and business that the sudden move by the customs authority would increase the duty of consumer goods imported in packaged form and thus lead to a spiral in prices of the commodities in the domestic market.

The NBR said it took the step in line with the global best practices of calculating the duty of the packaging materials, the cost of which is not included in the import prices of the goods.

The measure was also meant to protect domestic manufacturers from uneven competition and duty evasion as some traders import the goods by mentioning only the net weight of the product, according to Lutfor Rahman, a member for customs policy of the NBR.

The CIID said the order has raised concerns over a rise in false declaration of imports. And a reaction has already been witnessed among businessmen, it added.

The CIID said one of the main objectives of the customs administration was to maintain a business-friendly environment by ensuring uniform practices. But the order may hamper that, it said.

This may also lead to a spiral in prices of goods and affect consumers, according to the CIID.