Home ›› 05 Apr 2023 ›› Back
The government in the upcoming budget is likely to amend the customs act by including a provision that will give traders impunity for first-time inadvertent misdeclaration in import-export documents caused by Harmonised System (HS) code ambiguities.
However, if the misdeclaration happens again, they would have to pay a 200 per cent fine, as stated in the existing act. They would have to pay the fine even if the wrong declaration does not lead to any duty evasion.
The provision is likely to be included in response to the long-standing demand by importers and exporters for ending the HS code complexities, sources at the National Board of Revenue (NBR) said.
They said global experts have also spoken in favour of this as the move would increase transparency.
Exporters and importers believe the move will reduce their long-term suffering regarding HS code complexities. During pre-budget discussions with the NBR, they have explained such complexities that lead to unintentional misdeclaration.
For example, they said when importers bring in a certain product for which the revenue board has offered low rates, customs officials sometimes evaluate it under a different HS code.
Due to this, importers are deprived of the low rates and also pay a 200 per cent fine as it is considered that they are guilty of misdeclaration.
Importers in various sectors, including readymade garment, have raised their voice against such complexities for a long time, often terming it harassment.
Some customs officials said importers or clearing and forwarding (C&F) agents sometimes intentionally declare wrong information in documents and change HS codes to enjoy various government facilities or evade duties.
But it also happens unintentionally. For example, a businessman imports a raw material from China but does not know that it has two different HS codes – one applicable in China and the other in Bangladesh. He then declares the HS code applicable in China, and that is how the inadvertent mistake happens.
