KARACHI: The latest valuation ruling of toilet soaps would discourage legal imports and would give rise to smuggling, former Karachi Chamber of Commerce and Industry (KCCI) president A Abdullah Zaki told Customs Today.
The recent Valuation Ruling No 702/2014 dated November 25 has given no consideration to the origin of exports of toilet soaps and bracketed brands from various origins under one heading to fix the customs values.
For instance, in the previous valuation ruling the customs values for Yardley brand toilet soap from Europe/UK and UAE origins were assessed separately at $2,200 per metric tonnes and $900 per metric tonnes respectively. However, in the latest valuation ruling the same brand is assessed singly as $ 1.70 per kg of $1,700 per tonnes.
Similarly, in the previous valuation, ruling the customs values for Pears transparent toilet soap from UK and UAE/Indonesia origins were assessed at $1,984 per tonnes and $900 per tonnes respectively, but in the recent valuation ruling the same brand is assessed for custom value of 1.30 per kg or $1,300 per tonnes.
It seems that higher custom values are aimed at discouraging legal toilet soap imports into the country or else what could explain not taking into consideration the origin because USA/UK/European products, including soaps are subjected to a much higher duty than their counterparts in Asia, Middle East, Far East or any place else, Zaki said.
Zaki, a former vice chairman of Pakistan Soap Manufacturers Association, alleged that the latest valuation ruling has discouraged the import of new brands of toilet soaps into the country by subjecting “other brands” (meaning the brands in addition to over 5 dozen brands mentioned by name in the ruling) to a high customs values from $0.90, $1 and $1.70 per kg from “other origins”; Middle East/Saudi Arabia/Turkey; and Europe/USA/Canada origins.
Zaki said that none of the suggestions made by the toilet soap importers were taken into consideration. The importers had offered the manufacturers to buy the imported consignments at the values which the later suggested were under invoiced. They had also suggested to conduct a joint market survey overseen by representatives of importers, local manufacturers, FPCCI and KCCI but instead the Directorate conducted a market inquiry by itself, he added.
The prices of raw materials use in toilet soap manufacturing in the international market has dropped by 40-50 percent during the last few months and as such the latest Valuation Ruling seems but an attempt to discourage the legal imports in totality, Zaki said.
Putting the demand of toilet soap in the country at 200,000 per annum, he said that the local manufacturers are meeting just about 63 percent of the demand while legal imports and smuggling through the Afghan Transit Trade is meeting 7-8 percent and 13-14 percent of the demand. This means that at least 16 percent of the demand remains unmet from these three sources and with the latest Valuation Ruling bringing the legal imports to stop in totality the smuggling would take over these 7-8 percent legal imports thereby depriving the government substantial revenue.