Practice Area

Customs Law Services

Customs Law Services - Kakakhel Law Associates

Customs law refers to the duties, taxes, charges, or imposts levied by the government on imported or exported goods. Unlike internal taxes such as excise duties or sales taxes, customs duties are applied to the movement of goods, irrespective of sales or purchases. It is an indirect tax applied solely to goods and not services.

Customs law is enforced by the Federal Government on the import and export of goods in and out of Pakistan. The quantum of customs duty is determined by the Customs Act, 1969, Customs Rules 2001, and Customs Tariff 2021, along with relevant Notifications, Circulars, Case Laws, and Annual Finance Acts.

The objective of customs law is to ensure the proper enforcement of procedures related to the determination, payment, collection, and refund of customs duties. It aims to regulate the exportation and importation of goods, safeguard imports and exports, and align legal provisions with other laws, such as the Foreign Exchange Regulation Act, 1947.

Interpretation of Customs Act in Pakistan

The Customs Act, 1969 is a specialized statute with both fiscal and penal elements. The interpretation of such a statute follows well-established canons:

Where a statute creates a special offence and lays down a special procedure for the trial of such offences, it is that procedure which must be followed and not the ordinary and general procedures.
Where a special offence is created by a statute and the mode of punishment is provided, it is that mode which is to be followed and no other mode.
Where in a statute there are both general provisions as well as special provisions for meeting a particular situation, then it is the special provisions which must be applied to that particular case or situation instead of general provisions.
Fiscal statutes are to be construed strictly so far as liability to tax is concerned, but not in regard to proceedings in the realization of tax.
Notification generally to be construed as prospective unless otherwise expressly stated.
The subject should not be made liable for tax unless such a step is warranted by the clear provision of the statutes.
Where there is doubt in the matter, an interpretation favorable to the subject should be preferred.
There is no equity, intendment, or presumptions as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.
Interpretation helping evasion of tax is not permitted.
Substance and not form is to be taken into consideration.
Benefit should always be given to the subject in case of doubt.
A fiscal provision can be made with retrospective effect by the legislature by clear words, whereas a penal provision cannot be enacted with retrospective effect. Procedural change is always considered with retrospective effect.
The provisions of the Customs Act have to be strictly construed as their infraction involves penal consequences, and therefore, the burden of bringing unlawful import was on the Customs Authorities. In case they failed to discharge the burden, the benefit of doubt must go to the accused person.
While construing the fiscal statute, one must read words and interpret them clearly.
If the order passed is illegal, then perpetual rights cannot be gained on the basis of an illegal order, and in such a case, even the principle of locus poenitentiae would not apply.
If there is a passed departmental practice which is being carried on with the wrong interpretation and in violation of law, then such practice has to be stopped, and interpretation in accordance with the law has to be given effect.
Beneficial legislation being remedial and curative would be given retrospective effect. Beneficial fiscal legislation can, if needed, be regarded as applying retrospectively. Beneficial provisions of law are always retrospective in nature until and unless they have been made prospective by their implication. Remedial and curative statutes are always retrospective in nature.
When a special statute provides something to be done in a particular manner, the general provisions are ousted. Wherever the term "include" is used, the intention of the legislature was to give it the widest possible meaning.
The court always leans in favor of the constitutionality of legislation unless it is ex-facie violative of constitutional provisions.
Provisions of the statute would have to be construed harmoniously so as to advance the purpose of substantive provisions of law and to avoid conflict. No provision can be placed into service in order to defeat the real object of the main provision. Effect must be given, if possible, to all the words used in the statutory provision.

Foreign Exchange Regulation

Foreign businesses that import goods or provide services in Pakistan must comply with the Foreign Exchange Regulation Act, 1947 and rules issued by the SBP, the Customs Act, 1969, and sector-specific laws (for example, the Banking Companies Ordinance and rules and regulations of the SBP relating to the banking sector).

Pakistan Customs is tasked with ensuring that the following tasks are performed in the legally prescribed manner:

Register for Customs

The Application Form for Registration or Issuance of WeBOC User ID can be accessed by clicking here.

Revalidation of WeBOC

Periodical personal appearance of the User ID Holder before the Deputy / Assistant Collector at the User-ID Re-Validation section, with original CNIC and supporting documents.
The process includes taking a digital picture and thumb impression of the applicant upon personal appearance.
Visit of the business premises may be required, wherever applicable.

Procedure for Registration

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

Types of Registration

Following types of registration/WeBOC user IDs are given on the basis of eligibility criteria:

Trader
Commercial (i.e. Manufacturer, Manufacturer-cum-Exporter, Commercial Importer, Commercial Exporter)
Ship-Breakers
Trust / Non-profitable Organization
Government Department
Courier Services
Customs Agent
Bank Users
Bonded Carriers
Shipping Lines
Warehouse

Evaluating Pakistan Customs Tariff

Imported and exported goods in Pakistan are subject to customs duties as outlined in the Pakistan Customs Tariff. These duties, which include both import and export taxes, contribute approximately 37% to the total tax receipts. The customs duty rates are influenced by a variety of socio-economic factors. Typically, higher duties are imposed on luxury and non-essential goods, while industrial goods, such as machinery and raw materials, benefit from lower rates compared to consumer goods, reflecting an industrial bias in the tariff structure.

Customs Duty Drawback

The Federal Board of Revenue (FBR) has implemented a centralized online payment system for Customs Duty Drawback, enabling direct payments to exporters' bank accounts. To avail this service, exporters are required to update their WeBOC profiles. The system now includes an IBAN details section, where members must input the full IBAN number of the bank account already registered in their WeBOC profile to receive Customs Duty Drawback payments. Exporters are advised to complete this update as soon as possible to benefit from the electronic transfer facility for Customs Duty Drawback payments.

World Customs Organisation (WCO)

The World Customs Organization (WCO), originally founded in 1952 as the Customs Co-operation Council (CCC), is an independent intergovernmental organization dedicated to enhancing the effectiveness and efficiency of Customs administrations worldwide.

Currently, the WCO represents 182 Customs administrations that collectively process around 98% of global trade. As the global hub for Customs expertise, the WCO is the only international organization with specialized competence in Customs matters and serves as the recognized voice of the international Customs community.

The WCO facilitates dialogue and the exchange of experiences between national Customs delegates. It offers its members various conventions, international instruments, technical assistance, and training services, either directly from the Secretariat or with its involvement. The WCO also supports its members in modernizing and building capacity within their national Customs administrations.

Practice Area

Customs Law Services