- Mon - Fri: 08:00 - 21:30
In Pakistan’s import and export sector, accurate customs declarations are not just a matter of good practice—they are a legal requirement. Two of the most serious violations under the Customs Act, 1969 are misdeclaration and under-invoicing. Both offences are viewed as deliberate attempts to deceive customs authorities, evade lawful duties, and, in some cases, illegally transfer funds abroad.
In Khyber Pakhtunkhwa (KPK)—especially at Peshawar Customs—enforcement has become stricter due to the region’s role as a major trade route for goods coming from Afghanistan, Central Asia, and China. This makes it crucial for businesses, importers, and customs agents to understand the law, penalties, and defence strategies.
Misdeclaration occurs when an importer or exporter provides false, misleading, or incomplete information about their goods in customs documentation. This may include:
Under Section 32 and Section 32A of the Customs Act, 1969, misdeclaration is defined as fiscal fraud when done intentionally to evade duty or taxes.
Example: A trader imports 1,000 mobile phones but declares them as “mobile phone covers” to avoid high customs duties. This is misdeclaration and will be treated as deliberate fraud.
Under-invoicing is a type of misdeclaration where the declared value of goods is lower than the actual transaction value. The goal is to reduce customs duties, sales tax, and income tax payable at the import stage.
Example: If the actual cost of imported machinery is USD 100,000, but the invoice submitted to Customs declares USD 60,000, the importer is under-invoicing.
The primary legal provisions addressing misdeclaration and under-invoicing include:
The primary legal provisions addressing misdeclaration and under-invoicing include:
The consequences for misdeclaration and under-invoicing in Pakistan are severe, especially for repeat offenders. These include:
In KPK, especially at Peshawar Dry Port, Torkham Border, and Ghulam Khan, customs authorities have increased post-clearance audits and cross-verification with foreign export documents.
Recent enforcement actions include:
If you are accused of misdeclaration or under-invoicing under Pakistan’s Customs Law, taking immediate legal action is crucial to protect your goods and business interests. A strong and well-structured defence can be the deciding factor between confiscation and the release of your shipment. One effective approach is to present genuine commercial invoices along with verified bank payment records to demonstrate the accuracy of your declared value. Supporting documents such as contracts, purchase orders, and email correspondence with suppliers can further strengthen your position by proving that the declared price matches the actual transaction value.
You may also challenge the customs valuation by submitting evidence of prevailing international market prices for similar goods, which can help counter inflated assessments. If the initial decision is unfavourable, filing an appeal before the Collector (Appeals) or the Customs Appellate Tribunal offers a legal route to contest the ruling. In urgent situations where goods are at risk of being auctioned or penalties are imminent, seeking a stay order from the High Court can provide immediate relief while the case is under review.
As one of Pakistan’s most respected law firms—led by Mian Muhibullah Kakakhel, Senior Advocate Supreme Court—Kakakhel Law Associates has decades of experience in customs disputes, fiscal fraud cases, and trade compliance.
Our services include:
Case Assessment & Risk Review – Analysing the legal and financial exposure in customs disputes.
Customs Litigation – Representing clients before customs authorities, tribunals, and superior courts.