ISLAMABAD: The customs department is developing a database containing values of tradable items to eliminate the practice of under-invoicing.

An official of the department said the Directorate General (DG) of Valuation has collected values of 3,000 items in the database as a first step to minimise the chances of under-invoicing. Values of other tradable items will also be added to the database, he said.

Based on a thorough investigation, the DG also issued rulings to determine correct values of different types of imported goods. These valuation rulings are implemented by all clearance collectorates.

So far, almost 300 valuation rulings have been issued that cover 39 tariff lines. All these items were prone to under-invoicing, the official added. These rulings are also revised periodically based on prevailing international prices.

The DG issued 91 revised valuation rulings during the first six months of 2016.

Other measures that the customs department has taken to control under-invoicing pertain to the values of similar and identical goods. The same have been made available in the Web-Based One Customs (WeBOC) system, which is used as a reference for the assessment of goods whose valuation rulings don’t exist.

Similarly, an electronic data interchange with major trading partners, like China and the United Arab Emirates, is being used to access actual invoice values.

Under Section 156 (1) of the Customs Act, there are penalties for under-invoicing. If the offence is established, the offender is liable to pay a penalty that is three times the value of the under-invoiced good.

Besides, criminal proceedings can also be initiated against the offender depending upon the seriousness of the offence. Upon conviction by a special judge (customs), the accused can face imprisonment for not less than five years and up to 10 years.

However, the customs department has yet to convict any person under this law.

Published in Dawn, September 30th, 2016