Customs law services govern the duties, taxes, and regulations imposed by the government on imported and exported goods. In contrast to internal taxes like excise duties or sales taxes, customs duty is imposed on the movement of goods regardless of a sale or purchase. It is an indirect tax, applying to goods rather than services. Customs duty is imposed by the Federal Government on goods imported into or exported from Pakistan. The determination of the quantum of customs duty is reliant on the Customs Law Act, 1969, the Customs Rules, 2001, as well as the Customs Tariff, 2021, notifications, circulars, case law, and annual Finance Acts.

This law ensures proper execution of customs practices, including determining, paying, collecting, and refunding customs duty, as well as regulating imports and exports of goods. It also harmonises legal provisions with other legislation related to foreign exchange, such as the Foreign Exchange Regulation Act, 1947.

Interpretation of the Service Customs Law Act in Pakistan

The Customs Act, 1969, is a special statute and is considered both fiscal and penal in nature. The celebrated rules of interpretation of such a statute are:

• In cases where a statute provides a special offence and prescribes a special method of trial of a special offence, the method prescribed is the method to be followed and not ordinary and general methods.
• Where a special offence is established under a statute, and the mode of punishment is prescribed, then it is that mode of punishment which should be observed and no other.
• In the case of a statute where general provisions and the special provisions are presented to fulfil a certain situation, then the special provisions must be applied to that situation or case rather than the general provisions.
• Fiscal statutes should be strictly construed regarding tax liability, but not in matters relating to tax recovery proceedings.
• No word in a statute is presumed to be redundant or unnecessary.
• Notifications are generally interpreted prospectively unless expressly stated otherwise.
• A person cannot be subjected to tax liability unless expressly provided by statute.
• In such a case, where there is uncertainty on the issue, it should be interpreted in a manner that favours the subject.
• Equity, intention, and presumptions cannot be used to impose a tax. Nothing should be read in, nothing should be implied. The language utilised can only be looked into fairly.
• Evasion of tax through interpretation assistance is not allowed.
• Substance must prevail over form.
• The legislature may make a fiscal provision which is retrospective in force by the clear words used, but a penal provision is not possible. The change in the procedure is always viewed as having a retrospective effect.
• The provisions of the Customs Act must be strictly complied with, as violations may result in criminal liability. The benefit of the doubt must be given to the accused if the authorities fail to discharge their burden of proof.
• In the interpretation of the fiscal statute, there is a need to read the words and interpret them literally.
• Where the order issued is unlawful, then the purchase of perpetual rights cannot be made upon an unlawful order, and in such a situation, even the principle of locus poenitentiae would not have applied.
• When a departmental practice is maintained with a false interpretation and against the customs law, such a practice must be stopped, and the interpretation in light of the law must take effect.
• Beneficial legislation, being remedial and curative in nature, may operate retrospectively unless expressly stated otherwise. Remedial and curative statutes may operate retrospectively unless expressly stated otherwise.
• The general provisions are ousted in case a special statute gives something that must be done in a specific manner. The legislature had in mind to make the term include the broadest meaning possible wherever the term is employed.
• The court is always inclined towards the constitutionality of legislation, except when it is ex facie a violation of a constitutional provision.
• Statutory provisions would need to be interpreted in a way that they will promote the objective of the substantive law provision and prevent incompatibility. No provision can be put into service to frustrate the actual object of the main provision. All the words used in a statutory provision should, as a rule, be given effect.

Foreign Exchange Regulation

The imports and exports of goods or services in Pakistan by foreign businesses are subject to the Foreign Exchange Regulation Act, 1947 and the regulations issued by the SBP, the Customs Act, 1969 and Sectoral laws (such as the Banking Companies Ordinance and the SBP rules and regulations regarding the banking industry).

Pakistan Customs performs the following functions within the legal framework:

• Import & Export of legitimate cargo
• Trade Facilitation
• Trade Regulator
• Preventive (Control of Contraband Goods)
• Revenue Collection

Revalidation of WeBOC

• Periodical face-to-face appearance of the User ID Holder before the Deputy / Assistant Collector User-ID Re-Validation section, along with original CNIC and supporting documents.
• Procedure of capturing a digital photo and a thumbprint of the applicant during his/her physical presence.
• Pay a visit to the Business premises (where necessary).

Procedure for Registration

• Submission of application to Deputy / Assistant Collector, WeBOC User-ID Section, along with supportive / required documents.
• Personal appearance of the applicant before the Deputy / Assistant Collector, User-ID Section, with original CNIC.
• Process of taking a digital picture and a thumb impression of the applicant upon personal appearance.
• Visit to the Business premises (wherever required).
• Acceptance / Rejection of Application.
• Creation of a User-ID in case of acceptance of the application.
• Issuance of the login ID and automatic sending of a computer-generated password to the applicant through email.

Types of Registration Customs Law Services

Based on the criteria of eligibility, the following categories of registration/WeBoC user IDs are provided:

• Trader
• Commercial (i.e. Manufacturer, Manufacturer-cum-Exporter, Commercial Importer, Commercial Exporter)
• Non-Commercial
• Ship-Breakers
• Trust / Non-profit Organisation
• Diplomatic Cargo (Embassies)
• Government Department
• Courier Services
• Customs Agent
• Bank Users
• Bonded Carriers
• Shipping Lines
• Warehouse

Evaluating Pakistan Customs Tariff

The imported and exported goods in Pakistan are subject to the Customs duties imposed on them in the Pakistan Customs Tariff. The customs duties, in terms of the import duties and the export duties, make up approximately 37 per cent of the tax receipts. The reason is that there are a high number of socio-economic factors that determine the rate structure of customs duty. The overall plan, however, is to increase rates on luxury goods and even on less necessary goods. To provide the import tariff with industrial bias, the duty on industrial plants and machinery and raw materials has been maintained low compared to the one on consumer goods.

Customs Duty Drawback

FBR has created a Centralised System of online payment of Customs Duty Drawback payments straight into the Exporters’ bank account. Members are asked to update their WeBOC profile for this reason. Members are instructed to add their full Bank’s IBAN of the same Bank Account whose details are already available in the WEBOC profile to qualify for the Custom Duty Drawback, so adding the IBAN detail row in the given Bank account information area in the system. Members are encouraged to complete this process promptly to make use of the electronic transfer service for Customs Duty Drawback payments.

World Customs Organisation (WCO)

Created in 1952 as the Customs Co-operation Council (CCC), the World Customs Organisation (WCO) is an independent international organisation meant to improve Customs agencies’ efficiency and effectiveness.

Today, the WCO represents 182 Customs administrations throughout the world that collectively handle about 98% of world trade. The only worldwide organisation qualified in Customs affairs and thus rightly referred to as the voice of the international Customs community, the WCO is the global hub of Customs knowledge.

The WCO provides its Members a range of Conventions and other international tools, as well as technical aid and training services offered either directly by the Secretariat or with its participation, as a forum for conversation and experience sharing among national Customs delegates. The Secretariat also works hard to assist its Members in their attempts to transform their national Customs systems and foster capacity development.