Prices of Mobile Phones Expected to Rise in Pakistan

In a recent development, the Directorate General of Customs Valuation Karachi has introduced changes that are anticipated to lead to an increase in the prices of mobile phones in Pakistan. The customs values on the import of 1,160 models of various branded mobile phones have been rationalized, with additional models being incorporated into the list of valuation rulings. The new valuation ruling, numbered 1834 of 2023, was issued by the directorate on a Thursday.

As part of this update, the directorate has issued a comprehensive list spanning 25 pages, detailing the revised customs values for branded mobile phones. The primary objective of these changes is to reduce the margin of under-invoicing, particularly in existing and new models of branded mobile phones.

The impact of this new ruling is widespread, affecting various prominent brands such as Apple, Huawei, Samsung, OnePlus, Nokia, and more. Customs values have been adjusted for a total of 1,160 models of branded mobile phones. Notably, one of the significant features of this ruling is the addition of numerous new brands, aiming for a more accurate assessment of duties and taxes on the import of these mobile phones.

Previously, mobile phone values were determined under Section 25A of the Customs Act, 1969, through Valuation Ruling No. 1732/2023. However, the existing valuation ruling, which was approximately nine months old, did not accurately reflect the prevailing international market conditions. Furthermore, some models listed in the ruling had reached their End of Life (EOL) and required consideration for depreciation.

To address these concerns, the directorate initiated an exercise to determine the values of mobile phones under Section 25A of the Customs Act, 1969. Stakeholders emphasized the need for revised values considering the aging of mobile phone models, advocating for reasonable depreciation in the assessable value. A thorough analysis was conducted, involving the retrieval and scrutiny of 90 days’ clearance data. Market inquiries were conducted, and the directorate surveyed various markets to observe the actual prices of mobile phone devices.

The ruling underlines that used or refurbished mobile phones imported by bona fide passengers will be assessed based on customs values that account for their depreciation. The ruling also provides guidance for assessing brands and models not included in the annexure. Collectorates are advised to assess such cases under Section 81 of the Customs Act, 1969, and forward references to the Directorate for the final determination of values.

These changes signify a proactive effort by the Directorate General of Customs Valuation Karachi to align customs values with market realities, ensuring a fair and accurate assessment of duties and taxes on imported mobile phones. However, the anticipated increase in mobile phone prices underscores the evolving dynamics in the global market impacting local consumers.