Islamabad, Aug 21: According to a decision made by the Federal Board of Revenue’s (FBR) Customs Classification Committee, 4G MiFi modems and mobile WiFi modems would be subject to an 11 percent customs levy upon import.
Based on the observations of the Customs Classification Committee, the Collectorate Customs Appraisement (East) Karachi has rendered a decision in this regard.
The Classification Committee has determined that Pakistan Customs Tariff (PCT) heading 8517.6220 is the appropriate classification for the “4G MiFi modem and Mobile WiFi modem.”
The issue’s specifics showed that the categorization Committee was tasked with determining the proper categorization of Wi-Fi and Mi-Fi devices in accordance with Pakistan Customs Tariff after the Directorate of Post Clearance Audit (central) in Lahore forwarded the case to them.
The Directorate of Post Clearance Audit (Central) Lahore examined the import clearance data for the years 2015–17, according to a brief report from the referring Directorate.
produced by a number of telecom firms from MCC (Preventive/Appraisement), Lahore, revealed that Wi-Fi/Mi-Fi modems were incorrectly assigned to PCT heading 8517.6220 rather than the correct PCT heading 8517.6940, which corresponds to subscriber end equipment. Following this, the importer received an audit observation, and subsequently, a violation report was sent, in accordance with Section 179 of the Customs Act 1969 read with SRO 886(1)/2012 dated 18.07.2012, to the Collector of Customs (Adjudication) Lahore.
In support of the department, the adjudicating authority passed Order-in-Original No. 27/2018 and issued a Show Cause Notice.
Following a detailed examination of the pertinent sections of the Pakistan Customs Tariff (PCT) and the General Rules of Interpretation (GRIs), as well as a careful consideration of the arguments put forth by the department and the importer, the Classification Committee concluded that PCT heading 8517.6220 is the proper classification for “4G MiFi modem and Mobile WiFi modem.
” The devices under this area are specifically made to handle tasks that are essential to the operation of the Wi-Fi/Mi-Fi modems in question, such as data reception, conversion, transmission, and regeneration. Furthermore, in its explanation, the Pakistan Telecommunication Authority (PTA) stressed that the phrase “subscriber end equipment” is inclusive and can refer to a variety of end-user devices, independent of their particular functionalities.
This wide classification is incompatible with the specific roles played by Wi-Fi/Mi-Fi modems, which are mainly data processing and transmission devices. The concepts of GRIs 1 and 3(4), which state that items should be classified based on particular descriptions rather than more broad ones, further support this classification.
In this instance, the PCT heading 8517.6220’s function-based definition is more precise and detailed than the more general and ill-defined category of subscriber-end equipment. The customs committee stated that the Classification Committee has determined that the “4G MiFi modem and Mobile WiFi modem” are appropriately classified under PCT category 8517.6220.
