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FOR IMPORTS
PREPARED BY:
LEGAL SERVICES CELL-B&SDS
www.smeda.org.pk
HEAD OFFICE
legal@smeda.org.pk
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Clearance Procedure for Imports Legal Services Cell
1. INTRODUCTION OF SMEDA
The Small and Medium Enterprise Development Authority (SMEDA) was established
with the objective to provide fresh impetus to the economy through the launch of an
aggressive SME development strategy.
Since its inception in October 1998, SMEDA had adopted a sectoral SME development
approach. A few priority sectors were selected on the criterion of SME presence. In
depth research was conducted and comprehensive development plans were formulated
after identification of impediments and retardants. The all-encompassing sectoral
development strategy involved overhauling of the regulatory environment by taking
into consideration other important aspects including finance, marketing, technology
and human resource development.
SMEDA has so far successfully formulated strategies for sectors, including fruits and
vegetables, marble and granite, gems and jewellery, marine fisheries, leather and
footwear, textiles, surgical instruments, transport and dairy. Whereas the task of SME
development at a broader scale still requires more coverage and enhanced reach in
terms of SMEDA’s areas of operation.
Along with the sectoral focus a broad spectrum of services are now being offered to the
SMEs by SMEDA, which are driven by factors like enhanced interaction amongst the
stakeholders, need based sectoral research, over the counter support systems,
exclusive business development facilities, training and development for SMEs and
information dissemination through wide range of publications.
LSC believes that information dissemination among the SMEs on the existing
regulatory environment is of paramount importance and it can play a pivotal role in
their sustainable development.
In order to facilitate SMEs at the Micro Level LSC has developed user-friendly systems,
which provide them detail description of the Laws, and Regulations including the
process and steps required for compliance.
The purpose of this document is to disseminate information amongst the SMEs about
the Customs Clearance Procedure for Imports. For convenience of the readers a
process flow chart explaining the procedural details and sample of various forms are
also annexed with the document. The information given herein is provided on as is
basis with no liability of SMEDA of whatsoever as to any act or omission consequent
thereto.
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Clearance Procedure for Imports Legal Services Cell
It is a common belief by the importers in Pakistan that custom clearance is very difficult,
time consuming and cumbersome procedure. As a result it has become a common
practice to engage a clearing agency in fulfilling the requirements and procedures of the
customs departments, as well as clearance of consignments. However a part of the
negative perception relates to the low awareness level about the compliance requirements
for import procedure. It can be divided into two major segments. First appraisal, where
the goods are physically verified and customs duty is assessed and second appraisal
where the actual or final duty is calculated and levied upon the importer.
This document covers all the necessary aspects, which are the fundamental part in
clearance of goods/shipment and the process of assessment of customs duty and taxes.
Shipments may be received at either the Sea, Air port or Dry port declared by the
customs authorities as customs ports, customs air port and land customs station; the
procedure for clearance is same for every customs station.
Upon arrival of the off loaded goods, the clearance process starts. Normally at this point a
clearing agency is engaged by the importer to facilitate the process of customs clearance
and to reduce interface with the customs officials. Following documents are required and
provided to the clearing agent for processing.
a) Invoice of shipment
b) Packing list
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Clearance Procedure for Imports Legal Services Cell
c) Bill of lading
d) Copy of the Letter of Credit or Contract
If the importer is importing for the first time, following additional documents are to be
submitted:
It may be noted that now there is no need to obtain import and export licence from the
Export Promotion Bureau.
White Bill of Entry: The bill is prepared when the consignment is to be cleared against
the cash payment of the duty levied without transferring it to a warehouse.
Yellow Bill of Entry: This bill is filed when the shipment is transferred to the bonded
warehouses.
Green Bill of Entry: This bill of entry is used for the release of shipments which have
been placed in bonded warehouse against the yellow colored bill of entry.
The bill of entry should be completed in all respects and the amount of payable customs
duty, sales tax, income tax etc. should also be typed on the bill of entry, calculated on the
basis of invoice under the correct Pakistan Customs Tariff (PCT) Heading. The test
reports (where applicable) should be typed in case of chemicals. Similarly, in case of
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Clearance Procedure for Imports Legal Services Cell
imports of tea, the values certified by Pakistan Tea Association shall be declared on the
bill of entry for the purposes of assessment.
Next step is the Appraisement of the consignment. The designated customs officials
examine the goods to ensure whether the particulars given in the bill of entry i.e. amount
of duties and taxes, PCT Heading etc. correspond with the goods imported. Provided
there is no contradiction with the particulars given in the bill of entry and the goods
actually imported, the case is marked to the principal appraiser of the assessment hall, for
assessment of duties and taxes on the imported goods. On assessment of the duties and
taxes, the amount so assessed is deposited in the treasury and the goods are released.
The procedure for the yellow Bill of Entry is almost identical to the white bill of entry
however, the only difference is that instead of clearing the shipment against cash, it is
placed in a bonded warehouse. The customs appraisal procedure remains the same,
however, in case of filing of yellow bill of entry, a No Objection Certificate is required
from the bonded warehouse authority. In addition to NOC a surcharge amount equivalent
to 2% of the customs assessed value of the shipment or such other rate, as is for the time
being fixed by the CBR, is paid to the Government.
Bonded warehouse can be very helpful to business, which do not require the whole
shipment immediately released. It can be best utilized in case of shortage of cash amount
with an importer for the release of a consignment. It is a storage facility, where the
consignment is stored under secured conditions for a certain period of time that has been
predefined. The shipment remains in the bonded warehouse against nominal charges for a
specified period until the importer requires part of whole of the shipment, which can be
cleared and released against the filing of green bill of entry.
IMPORTANT ISSUE:
Once the white bill of entry is filed for clearance of goods, it is not possible to transfer
the consignment into bonded warehouse.
Where the owner does not have full Information about the consignment:
In case an owner of a shipment is unable to make complete entry of the goods
imported in a bill of entry, he may make a declaration to that effect before the
appropriate officer with the request to examine the goods. The appropriate officer
may, subject to the conditions prescribed by the Collector, permit such officer to
examine the goods in the presence of an officer of customs or to deposit of such
goods in a public warehouse without warehousing the same, pending the production
of such information.
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Clearance Procedure for Imports Legal Services Cell
On delivery of the bill of entry, the goods or any part thereof is examined without delay
for the purposes of assessment of customs duty and other taxes thereon. This examination
is made in the following manner:
First appraisal of the consignment: During first appraisal the case is forwarded to the
appraisement hall where the specific percentage of goods imported is determined for
examination. The principal appraiser marks the case to the Inspector and Deputy
Superintendent for examination. The inspector after examining the goods marks the case
to the Deputy Superintendent for further approval. Provided the case is approved by both
of them, the case is referred to the Principal Appraiser for assessment of customs duty
and other taxes thereon.
The second appraisement of the shipment is carried out by the customs department in
reference to the report forwarded by the principle appraiser along with documents
submitted by the clearing agent for determination of customs duty.
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Clearance Procedure for Imports Legal Services Cell
An officer not below the rank of Assistant Collector or Deputy Collector of Customs may
order that the duty payable on such goods be assessed provisionally subject to the
payment of any additional amount or furnishing of bank guarantee for the purposes of
securing payment of duty, if any, payable on final assessment, by the importer, as such
officer deems sufficient.
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Clearance Procedure for Imports Legal Services Cell
There is no need to file any document to the customs. All the declarations (Bills
of Entry, shipping Bills etc.) are electronically available online.
IMPORTANT
PACCS has a highly sophisticated automated Risk Management System and designed to
detect any illicit practices. Therefore, in order to avoid delays and confusion later it is
advisable to file your declaration carefully and to ensure that correct information is
declared to customs.
The Customs if not satisfied with the declaration may also require additional
information, verify certain documents, question value, HS code etc.
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Clearance Procedure for Imports Legal Services Cell
In case the importer is still not satisfied with decision of the Customs, he may get
his cargo cleared from the port by furnishing security equivalent to the differential
amount. In such an event the case would be automatically forwarded to the valuation
department, HS committee etc. depending upon the nature of the dispute.
However, in case the importer does not clear your cargo by furnishing the security, he
may challenge the decision before the relevant appellate authorities.
In addition to the above, on some other main ports including Lahore, Peshawar etc. other
than KICT, Customs Clearance procedure under ACP is also operative. The same is
however, available to following eligible importers:
II. All the importers, having import value more than Rs. 30 million during
last twelve months will be eligible for ACP as per parameters laid down in
implementation strategy (para 3).
III. The import of risk prone commodities shall not fall in the preview of ACP.
IV. The clearing agents (upto five) who have been clearing goods of such
importers in the past one year would be taken as nominated clearing
agents, unless otherwise desired by such importers through application to
the Deputy Collector, Import Section or any proceedings have already
been initiated against clearing agent under customs law or.
V. The importers who do not meet the ACP criteria may also apply to the
Collector for special enrollment.
VI. The facility of ACP shall be withdrawn at any stage if it is found that a
case of misdeclaration or fiscal fraud exists or has been detected against
the importer, (or a director in case of company / firm).
VII. The facility of ACP will be availed only for goods imported against valid
LC (letter of Credit) or registered bank contract.
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Clearance Procedure for Imports Legal Services Cell
b) Import of scrap of all kinds, second hand machinery, job lot / stock
lot goods;
22. M/s. PRAL has been authorised by the customs authorities to feed the list of
names of importers in the data base to whom facility of ACP will be extended.
This list is duly signed by all the Additional Collectors (Appraisement) and
Collector (Appraisement).
23. The system under ACP aims to process the customs declarations made at the
time of import by notified eligible importers, on the Goods Declaration (GD)
form, using Custom House computer. However, under the facility about 10%
of such declarations will be checked in detail randomly in order to ensure their
authenticity.
25. Unless the case is selected for random check, the computer system prints on
the Good Declaration, ‘CLEARED UNDER ACP’. All such Goods
Declarations shall not be presented in Assessment Group for manual
assessment or processing. The assessment for the purposes of duties and taxes
would be made automatically by the computer. The assessment aspect of such
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Clearance Procedure for Imports Legal Services Cell
26. In case the case is not selected for random checking, following procedure is
followed for clearance of goods:
b. In case of LCL cargo, the marks and numbers and total number of
packages are tallied at wharves, sheds etc. The Goods Declaration of
LCL cargo shall be “out of charge” by Principal Appraiser (Shed). If
the number of packages / quantities or marks and number do not tally,
this fact will be endorsed in the computerized examination report and
detailed examination will be carried out.
c. The Examining Officer (exit gate) shall re-verify the container number
and seal number in case of FCL cargo, marks and numbers in case of
LCL cargo; and payment of duty stamp on the Goods Declaration,
before goods are allowed out of customs area.
Notwithstanding the above, as per the facility, the computer system at Customer
Service Centre at the ports may also randomly select GDs for detailed scrutiny
and processing (assessment) and examination of goods. Such GDs shall be
marked by computer system ‘RANDOMLY SLECTED FOR DETAILED
PROCESSING AND EXAMINATION UNDER ACP’. ALL SUCH Goods
Declaration will be presented in Assessment Groups and to shed examination staff
for examination as per examination order. In cases, where Goods Declaration
selected is for more than 10 containers the examination shall be of 20% of the
total number of containers, unless otherwise ordered by the Assistant Collector in
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Clearance Procedure for Imports Legal Services Cell
charge. The Principal Appraiser (Shed), after satisfying himself will “out of
charge” all such Goods Declarations.
The facility of ACP will stand withdrawn on detection of any discrepancy or mis-
declaration, which shall be fed in the main computer system by the person / group
/ section making detection by filling out form ACP-2. This will form a part of the
company profile kept on the customs data base, unless otherwise order by the
Collector of Customs.
It may be noted that in cases where the goods are cleared under the facility
of PACCS or ACP, only white bills of entry shall be used for clearance of
goods against cash, in bond or out bond. However, in all other cases usual
mode of clearance of goods as described herein above shall be operative.
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