Legal Provisions Related To Custom Duties

Legal Provisions related to Custom Duties
2nd Assignment
ALLAMA IQBAL OPEN UNIVERSITY

(Department of Business Administration) Assignment # 2 Taxation Management (5526)
TOPIC: LEGAL PROVISIONS RELATED TO

CUSTOM DUTIES
Submitted to: Sir Muhammad Zeeshan Submitted by: Ishtiaq Ahmed
AH-526270
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2nd Assignment
Acknowledgement
All praises to Almighty Allah, the most Gracious, the most Beneficent and the most Merciful, who enabled me to complete this assignment. I feel great pleasure in expressing my since gratitude to my teacher, for his guidance and support for providing me an opportunity to complete my Project. My special thanks and acknowledgments to Mr. Zeeshan for providing me all relative information, guidance and support to compile the practical study at MCB. I will keep my hopes alive for the success of given task to submit this report to my honorable teacher Sir Muhammad Zeeshan, whose guidance; support and encouragement enable me to complete this assignment.
2nd Assignment
Executive Summary
A customs duty is a tariff or tax on the importation (usually) or exportation (unusually) of goods Customs duty is a kind of national tax revenue, which is its most essential nature. The purpose of customs duty collection is to maintain sovereignty and promote the national economic construction. The customs duty can be divided into different categories according to different standards or from different angles. According to the flow direction of the import and export goods, it can be divided into import duties, export duties and transit duties. Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country. Custom Act 1969 defines some provisions related to custom duties. There are some weaknesses in the custom system of that can be removed by taking some steps.
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Table of Contents
Contents
Page No
01 02 03 04 05 15 19 20 22
1. Title page 2. Acknowledgement 3. Executive Summary 4. Table of contents 5. Introduction to the topic 6. Practical study of organization 7. Data collection Methods 8. SWOT analysis 9. Conclusion
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10. 11.
Recommendations References
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Introduction to Topic
Customs Duty
A customs duty is a tariff or tax on the importation (usually) or exportation (unusually) of goods Customs duty is a kind of circulation tax levied on the goods and articles entering or leaving the customs territory by the Customs on behalf of the nation in conformity with the tariff policies formulated by the nation as well as the tax laws and the import and export tariffs promulgated and implemented by the nation. Customs duty is a kind of national tax revenue, which is its most essential nature. The nation is the subject of taxation of Customs duty. Customs duty is collected from the taxpayers by the Customs on behalf of the nation. The object of taxation is the goods and articles entering or leaving the customs territory. The laws, the administrative rules and regulations formulated by the nation are the foundation of the Customs duty collection.
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Importance of Customs duty:

The importance of Customs duty is determined by its basic nature. Although the function of Customs duty is not entirely the same in different times of different countries, the basic function of it is the consistent embodiment of national sovereignty. The purpose of customs duty collection is to maintain sovereignty and promote the national economic construction. Practically, the so-called Import Duties and Taxes in some international conventions and agreements differ with the concept of Import Customs Duties. Import Duties and Taxes include Import Customs Duties and other domestic taxes levied on the imported goods. After going through duty-levying procedure and approved by the customs, imported goods should be regarded as the domestic commodities and treated equally with home-made commodities, and therefore, should be levied domestic taxes likewise. Usually, domestic taxes are levied by the customs during import period, but they dont fall into the category of customs duties.
The Classification of Customs Duties:

The customs duty can be divided into different categories according to different standards or from different angles. According to the flow direction of the import and export goods, it can be divided into import duties, export duties and transit duties; according to the taxation standard(or taxation method), it can be divided into ad valorem duties, specific duties, mixed duties (including compound
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duties, alternative duties), sliding duties, seasonal duties, variable levies, etc; according to the nature of the customs duty, it can be divided into ordinary customs duties, preferential duties (mostfavored-nation duties, preferential duties, generalized system of preference, etc), differential duties (anti-dumping duties, antisubsidy duties and retaliatory taxes); according to the primary purpose of tax collection, it can be divided into revenue duties and protective duties, which are the concepts of customs duties sometimes used in making customs policies; according to the restrictions from other countries or international organizations when formulating customs duties, it can be divided into autonomous tariffs, non-autonomous tariffs, state-designated duties, agreement tariffs, and bound tariffs, etc. Customs duties can also be divided into principle duties and additional duties; the latter is as opposed to the former. The principle duty is the regular duty specifically listed in the customs tariffs while the additional duty is a kind of duty levied besides the principle duty due to some specific needs. Usually additional duties are temporary or provisional.
Customs
Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country.
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Depending on local legislation and regulations, the import or export of some goods may be restricted or forbidden, and the customs agency enforces these rules. The customs authority may be different from the immigration authority, which monitors persons who leave or enter the country, checking for appropriate documentation, apprehending people wanted by international arrest warrants, and impeding the entry of others deemed dangerous to the country. In most countries customs are attained through government agreements and international laws. Custom in law is the established pattern of behavior that can be objectively verified within a particular social setting. A claim can be carried out in defense of "what has always been done and accepted by law." Customary law exists where: 1. a certain legal practice is observed and 2. the relevant actors consider it to be law
Custom Act 1969

Short title, extent and commencement:
1) This Act may be called the Customs Act, 1969.
2) Extends to the whole of Pakistan. 3) It
shall come into force on such date as the Federal
Government may, by notification in the official Gazette, appoint.
General:
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This section corresponds to Section 1 of the Sea Customs Act and Section 1 of the Land Customs Act. Provisions have been made for bringing into force the new Act from such date as may be considered expedient by the Federal Government.
Extent:
a) This Act extends to the whole of Pakistan. The Territories of Pakistan comprises of
b) The provinces of Baluchistan, the North West Frontier, the
Punjab
and
Sind;
the Islamabad Capital Territory (i.e. Federal Capital);

c) The Federally Administered Tribal Areas; and d) Such States and territories as are or may be included in
Pakistan, whether by accession or otherwise. (Article 1 (2) of the Constitution of the Islamic Republic of Pakistan, 1973).

A. Power to depute officers of customs to
board conveyances:
At any time while a conveyance is in a customs-station or is proceeding towards such station, the appropriate officer may depute one or more officers of customs to board the conveyance, and every officer so deputed shall remain on board such conveyance for such time as the appropriate officer may consider necessary.
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B. Officer to be received and accommodation
to be provided:
Whenever an officer of customs is so deputed to be on board any conveyance, the person-in-charge shall be bound to receive him on board and provide him with suitable accommodation and adequate quantity of fresh water.
C. Officer's power to access, etc:

1. Every officer deputed as aforesaid shall have free access to
every part of the conveyance and may: a) Cause any goods to be marked before they are unloaded from the conveyance; b) Lock up, seal, mark or otherwise secure any goods carried in the conveyance or any place or container in which they are carried; or c) Fasten down any hatchway or entrance to the hold. 2. if any box, place or closed receptacle in any such conveyance be locked, and the key be withheld, such officer shall report the same to the appropriate officer, who may thereupon issue to the officer on board the conveyance, or to any other officer under his authority, a written order for search. 3. On production of such order, the officer empowered there under may require that any such box, place or closed
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receptacle be opened in his presence; and if it be not opened upon his requisition, he may break open the same.
D. Sealing of conveyance:
Conveyance carrying transit goods for destinations outside Pakistan or goods from some foreign territory to a customs-station or from a customs-station to some foreign territory may be sealed in such cases and in such manner as may be provided in the rules.
E. Goods not to be loaded or unloaded or
water-borne except in presence of officer:

Save where general permission is given under section 67 or with permission in writing of the appropriate officer, no goods other than passengers' baggage or ballast urgently required to be loaded for the vessel's safety, shall be shipped or water-borne to be shipped or discharged from any vessel, in any customs-port, nor any goods except passengers' baggage shall be loaded in or unloaded from any conveyance other than a vessel at any land customs-station or customs-airport except in the presence of an officer of customs.
F. Goods not to be loaded or unloaded or
passed on certain days or at certain times:

Except with the permission in writing of the appropriate officer and on payment of such fees as may be prescribed by the Board no
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goods, other than passengers' baggage or mail bags, shall in any customs-port be discharged, or be shipped or water-borne to be shipped or shall be loaded or unloaded or passed at any land customs-station or customs-airport a) on any public holiday within the meaning of section 25 of the Negotiable Instruments Act, 1881 (XXVI of 1881), or on any day on which the discharge or shipping of cargo at customs-port or loading, unloading passage or delivery of cargo at any land customs-station or customs-airport, as the case may be, is prohibited by the Board by notification in the official Gazette; or
b) On any day except between such hours as the Board may, from
time to time, by a like notification, appoint.
G. Goods not to be loaded or unloaded except
at approved places:
Save where general permission is given under section 67 or with permission in writing of the appropriate officer, no imported goods shall be unloaded or goods for export loaded at any place other than a place duly approved under clause (b) of section 10 for the unloading or loading of such goods.
H. Power to exempt from sections D and
G:
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Notwithstanding anything contained in section 64 or section 66, the Board may, by notification in the official Gazette, give general permission for goods to be loaded at any customs-station from any place not duly appointed for loading and without the presence or authority of an officer of customs.
I. Boat-note
1) When any goods are water-borne for the purpose of being
landed from any vessel and warehoused or cleared for homeconsumption, or of being shipped for exportation on board any vessel, there shall be sent, with each boat-load or other separate dispatch, a boat-note specifying the number of packages so sent and the marks or number or other descriptions thereof. 2) Each boat-note for goods to be landed shall be signed by an officer of the vessel, and likewise by the officer of customs on board, if any such officer be no board, and shall be delivered on arrival to any officer of customs authorized to receive the same. 3) Each boat-note for goods to be shipped shall be signed by the appropriate officer and, if an officer of customs is on board the vessel on which such goods are to be shipped, shall be delivered to such officer, and if no such officer be on board, shall be delivered to the master of the vessel or to an officer of the vessel appointed by him to receive it. 4) The officer of customs who receives any boat-note of goods landed, and the officer of customs, master or other officer as
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the case may be, who receives any boat-note of goods shipped, shall sign the same and note thereon such particulars as the Collector of Customs may from time to time direct. 5) The Board may from time to time, by notification in the official Gazette, suspend the operation of this section in any customsport or part thereof.
J. Goods water-borne to be forthwith landed
of shipped:
All goods water-borne for the purpose of being landed or shipped shall be landed or shipped without any unnecessary delay.
K. Goods to be transshipped without
permission:
Except in cases of imminent danger, no goods discharged into or loaded in any boat for the purpose of being landed or shipped shall be transshipped into any other boat without the permission of an officer of customs.
L. Power to prohibit plying of unlicensed
cargo-boats:
1) The Board may declare with regard to any customs-port, by notification in the official Gazette, that, after a date therein specified, no boat not duly licensed and registered shall be
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allowed to ply as a cargo-boat for the landing and shipping of merchandise within the limits of such port. 2) In any port with regard to which such notification has been issued, the Collector of Customs or other officer whom the Board appoints in this behalf, may, subject to rules and on payment of such fees as the Board may, by notification in the official Gazette, prescribe, issue licenses for and register cargoboats, or cancel the same.
M.
Plying of ships of less than one hundred
tons:
1) Every boat belongs to a Pakistani ship and every other vessel
not exceeding one hundred tons, shall be marked in such manner as may be prescribed by rules.
2) Plying of all or any class or description of vessels of less than
one hundred tons, whether in sea or inland waters, may be prohibited or regulated or restricted as to the purposes and limits of plying by rules.
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Practical Study of the Organization
AMIN FEROZ & CO. (PVT) LTD.
History of the Organization:

AFCO was established in 1935 to market and promote world class products of reputable overseas companies as their sole representatives in the South Asian region. After 1948, it served as sole agents for various companies including Monsanto Company, St. Louis (USA). Currently AFCO holds exclusive agencies for US-based Solutia Inc. (The chemicals group formed after spin-off of Monsanto Company's Life Sciences and Chemicals businesses); Finnfeeds International (USA); Flexsys Inc. of USA; J M Huber Corporation of USA; and Novus International (USA); all with offices world-wide.
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As a result, AFCO supplies a vast variety of industrial raw materials manufactured by its overseas principals. Products include raw materials for plastics, rubber chemicals, leather chemicals, animal feed, detergents, enzyme systems, aviation fluids, heat-transfer fluids, special-purpose chemicals, and many other industrial materials. Amin Feroz & Company regularly serves over 30 satisfied industrial customers Pakistan-wide. We are a well established group of Pakistani companies operating since 1935. We are exclusive representatives for various multinationals in Pakistan. Products range from feed additives to industrial specialty chemicals. Our current industrial engagement involves operating the first fully-computerized poultry feed manufacturing plant in Pakistan, with all machinery, etc. imported from Holland. Our group headquarter is located in Karachi, with branch offices in all major cities of Pakistan (Lahore, Faisalabad, Gujranwala and Sialkot), employing over 180 persons. Group Companies include: AFCO, UIE, FFL and SG.
Group Product Lines:

GARMENTS
LEATHER & TEXTILE DYESTUFFS & PIGMENTS POULTRY FEEDS INDUSTRIAL CHEMICALS, SPECIALTY CHEMICALS
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UNIQUE IMPORT EXPORT:

Established in 1978 as the exclusive distributor of world's leading dyestuffs manufacturers, UIE is well entrenched in the Pakistani Dyestuffs market. Working on the philosophy of consistent quality and competitive pricing, UIE supplies world-renowned dyes from BASF Germany (formerly ICI (Imperial Chemical Industries) UK's dyestuffs business), STHAL Leather Dyes of UK, and ATUL India Ltd (formerly ICI India). UIE also deals in dyes for Dystar of Germany. UIE serves customers in the Punjab and Sindh provinces, and covers a sizable fraction of Quality conscious customers. An independent & well-coordinated sales team with 10-25 years experience delivers reliable customer service on-site and keeps up-to-date with changing market trends. Expedient Technical Service is provided with the aid of our well-equipped laboratories located in Karachi and Lahore. These Quality Control laboratories are equipped with Color Matching DATA COLOR Systems HT Machines.
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Practical Study of the Organization with respect to the issue

Amin Feroz & Company obeying all the Provisions that are defines in the Custom Act 1969, that provisions are given below, Power to depute officers of customs to board conveyances Officer to be received and accommodation to be provided Officer's power to access, etc Sealing of conveyance Goods not to be loaded or unloaded or water-borne except in presence of officer Goods not to be loaded or unloaded or passed on certain days or at certain times Goods not to be loaded or unloaded except at approved places Power to exempt from sections D and G Boat-note Goods water-borne to be forthwith landed of shipped Goods to be transshipped without permission Power to prohibit plying of unlicensed cargo-boats Plying of ships of less than one hundred tons
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Data collection Methods
o o
Primary Data:
Keen observation Research
o o o o
Secondary Data:
Book Of Taxation Management Internet Teacher notes Discussions
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SWOT analysis
The acronym SWOT stands for a firm is internal Strengths and Weaknesses and its external Opportunities and Threats. The purpose of such analysis is to build on companys strengths in order to exploit opportunities and counter threats and to correct companys weaknesses. SWOT analysis is based on the assumption that if managers carefully review such strengths, weaknesses, opportunities, and threats, a useful strategy for ensuring organizational success will become evident. Strengths and weaknesses typically relate to the internal
environment of an organization, whereas opportunities and threats are brought about by the external environment of an organization.
Strength:
Strength can be defined as an area where a company is best at doing something or a feature that puts the company at an advantage in comparison to its competitors. Covering the whole things Brief description is available on everything related to exports and imports Supported by Law
Weakness:
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A weakness is defined as an area in an organization where the organization is not as good at doing something as its competitors or a thing which an organization lacks thus putting the organization at disadvantage in comparison to its competitors. Not completely following due to corruption Inefficient custom staff Importer and exporter are not well known about custom provisions.
Opportunities:
An opportunity can be defined as a change in external environment which if properly exploited with the organizational strengths will result in enhanced sales market share or income. Education and training of Custom staff
Threats:
Threat can define as a change in external environment which if not met with proper strategies will result in loss of revenues market share or income. Corruption
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Conclusion
I have concluded that,
A customs duty is a tariff or tax on the importation (usually) or
exportation (unusually) of goods Customs duty is a kind of national tax revenue, which is its most essential nature. The purpose of customs duty collection is to maintain The customs duty can be divided into different categories Customs is an authority or agency in a country responsible sovereignty and promote the national economic construction. according to different standards or from different angles.
for collecting and safeguarding customs duties and for controlling the flow of goods.
AFCO is an import/Export company that is following the Custom Act 1969 defines some provisions related to custom There are some weaknesses in the custom system of Pakistan But these weaknesses can be removed by taking some steps.
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provisions of custom act 1969 by spirit and by practice.
duties. like corruption and lack of knowledge related to custom duties.
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Recommendation
Government of Pakistan should have to take strong steps Employees should be trained and educated. Time to time seminars should be held related to Custom Act Recruitment and selection process for customs staff should
against corruption in the Custom department.
for both importer/exporter and Custom staff. be strict and monitored by Federal Government.
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Reference
Project report Legal provisions related to custom duties
www.slideshare.com http://www.afco.com.pk/ http://www.mcb.com.pk//whyMCB.php http://en.wikipedia.org/wiki/afco_Pakistan http://www.scribd.com/doc/24651033/HR-REPORT-culturalcompatible-practices-in- afco
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TOPIC: LEGAL PROVISIONS RELATED TO