Pakistan Customs

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Pakistan Customs (Urdu: رسوم پاکستان) is one of the elite cadres of the Civil Service of Pakistan. It is serving as the guardian of Pakistan's borders against movement of contra band goods and is a facilitator of bona fide trade. It provides a major source of revenue to the Government of Pakistan in the form of taxes levied on the goods traded across the borders. It also helps to protect the domestic industry, discourage consumptions of luxury goods and stimulate development in the under -developed areas. Customs and Regulatory duties amount up to 15% of the total receipts collected by the Federal Board of Revenue. Pakistan Customs is manned by officers from the Pakistan Customs Service (PCS) which has been one of the premier occupational group amongst Pakistan's civil services. Previously known as the “Customs & Excise group”, it was re-classified as Pakistan Customs Service in November 2010, when the responsibility of Sales Tax & Federal Excise was taken away and a new occupational service developed to collect Sales Tax, Federal Excise and Income Tax namely Inland Revenue Service (IRS). This has given PCS officers an opportunity to focus on their core function of acting as guardian of the nation’s borders against illegitimate trade and regulating bona fide trade. While the role of Pakistan Customs Service has been greatly diminished because of the loss of sales tax and federal excise to IRS, the move has allowed Pakistan Customs Service to become a lean and mean service with enhanced focus on border control.

The anti-smuggling powers delegated previously by Pakistan Customs to Pakistan Rangers and FC were withdrawn in view of expansion of PCS in border regions and now Pakistan Customs is planning to have an enhanced anti-smuggling role in border areas which will allow it to play an important role in national development. The shift in the role of Pakistan Customs from a revenue-collection agency to a border control agency with substantial responsibility in safe-guarding country’s trade policies is what appears to be the future of Pakistan Customs Service.

New Custom House building Karachi

Ranks in Pakistan Customs Service[edit]

Member Customs/ Chief Collector (North/South/Central)

  1. Collector of Customs
  2. Additional Collector of Customs
  3. Deputy Collector of Customs/ Assistant Collector of Customs
  4. Superintendent of Customs/ Superintendent of Intelligence & Investigation / Superintendent of Preventive Services/ Principal Appraiser
  5. Deputy Superintendent of Customs/ Senior Intelligence Officer/ Inspector Preventive Services/ Appraissing officer
  6. Inspector of Customs/ Intelligence Officer/Senior Preventive Officer / Examining Officer
  7. Office Superintendent
  8. Stenographer
  9. Stenotypist
  10. Wireless Operator
  11. Head Clerk
  12. Upper Division Clerk (UDC)
  13. Lower Division Clerk (LDC)
  14. Head Constable/ Hawaldar/ Kot Gusht
  15. Driver
  16. Constable / Sepoy

WeBOC[edit]

Web Based One Customs: Web-based customs clearance system that provides real time integration of agents, brokers, terminal operators, cargo handlers and customs officials for the clearance of trade consignments and collection of duties/allied taxes. Will be implemented across Pakistan at all customs stations including sea, air and dry ports. Will ultimately process and manage the collection of 45% of Pakistan's total tax revenue, connect 30,000 trade related stakeholders and reduce customs clearance from and average 5-10days to 2hrs-24hrs. But as per Custom Agents it takes 5-10 Days only in examination and Single Consignment which can easily clear in 2 days can take at least 15 Days for clearance due to misbehavement of Customs Authority and Bugs and Errors of System.

FBR is currently engaged in the issue of replacing PaCCS with WeBOC due to a long-standing issue with Agility Solutions over the use and intellectual property of PaCCS. Traders and Customs officials are keen to use WeBOC all over Pakistan because is a home grown solution and can be easily modified to shape up and provide more effective customs control and better trade facilitation. However, vested interests in FBR and Ministry of Finance are trying to make an expensive sale of PaCCS to FBR which will cost Government of Pakistan nearly USD300mln.

The following information has been taken from the book "WEBOC-Complete Concepts and Techniques- Professional Guide" by Syed Tanvir Ahmad published by Sohaib Publishers (0300-8254446), Karachi, Pakistan

WeBOC - Introduction and history[edit]

WeBOC (Web Based One Customs) is fully integrated paperless Pakistan customs computerized clearance system which has started to revolutionize the way imports / exports are carried out in Pakistan as well as in the region. WeBOC has proved itself as a dependable and established product of international standing. As compared to previous system (One Customs – processing on computer along with manual processing on hard copies), WeBOC provides an opportunity to file Goods Declaration on line after attaching scanned documents, if required. The system calculates the quantum of duty and taxes on the spot and generates a message to the filer to deposit the same, which can be paid online (through Personal Deposit account facility).

A risk management system operates at the back end. The consignments selected by the system under green channel are cleared immediately after payment of duty and taxes. At present, almost 30-33% consignments are cleared under green channel. Remaining consignments are sent either to yellow channel (on line scrutiny of documents by assessing officer on the basis of declaration, without examination of the goods) or red channel where examination (or inspection) is conducted. As a result of this system examination has been reduced from 100% to around 40%. Moreover, presence of importer’s representative/ clearing agent is not required. First-in first-out (FIFO) based assessment scheme has reduced chances of undue favor or manipulation by customs staff.

Appearance of trader or customs agent is not required. Documents, if required by an assessing officer are called through e-mail. These can be submitted (along with explanation) electronically, if importer does not want to opt for personal appearance. Complete online adjudication process is available round the clock. All custom formalities are completed online by the concerned staff. Communication with the custodians of goods/port authorities, terminal operators, off-dock terminals, is made through EDI (electronic data interchange) messaging.

The paperless computer system has substantially curtailed processing period which has in turn reduced cost of doing business. This has not only simplified a number of procedures, but also brought transparency (less interaction with the customs staff) and certainly more revenues for the exchequer. Needless to mention that in the redundant system each bill of entry (goods declaration) for imports required 34 signatures & 62 verifications. Furthermore, multiple copies and numerous mandatory documents were required to be attached with the GD. All these documents were carried from desk to desk by the importer. For shipping lines various documents had to be submitted to many customs offices. Several customs offices were involved in the process depending on the type of GD i.e., imports, temporary imports, exports, warehousing, baggage etc.

Though no perfect method to quantify the increase in revenue can be relied upon, yet there are clear evidences which suggested that substantial increase in revenue was registered due to improved custom processes. I will quote only one instance. Before WeBOC the exemption of withholding tax was used to be granted on submitting hard copy of exemption certificate to the PRAL key punch operator, who entered that number manually and importer used to get exemption. A large number of fake exemption certificates were detected in the past. In WeBOC system the exemption and concessions were being entered on line by the Commissioner (IRS). Commissioner Withholding Tax, Karachi had acknowledged the fact in a meeting that in new automated system collection of withholding tax at import stage had increased more than 15-20% (to the tune of 15-20 billion rupees) after its implementation. A chunk of this amount is attributed to automation.

Presently following modules/functionalities are accessible in the system.

MODULES / FUNCTIONALITIES IN OPERATION

1. User Management System 2. Carrier Declaration 3. Goods Declaration

4. Assessment Management 5. Risk Management System 6. Examination Management

7. Payments Management and Reconciliation 8. Security Management 9. Adjudication

10. Exemption Regime Management 11. Tariff Management 12. Duty & Tax Computation Engine

13. Clearance Management 14. Refunds Management 15. Rebates Management

16. Recoveries 17. Quota Management 18. DTRE Management, Form S

19. CKD Kits (EDB) 20. Vehicle assessment

21. Electronic Data Interchange (with KICT, PICT, KPT, Off dock terminals) 22. Safe Transportation

23. Post Clearance Audit 24. Warehouse Management 25. Trans-Shipment Management

26. Transit Management Commercial 27. Transit NATO/ISAF/US military 28. Manifest Clearance 29. Valuation

30. Sealing/De-sealing 31. Solid Bulk Cargo 32. Liquid Bulk Cargo 33. Embassies & privileged persons

34. Temporary Imports 35. Air Freight units 36. Gift/Donation/Charity (Exports) 37. Air Carrier Declaration

38. Monitoring & tracking of Containers 39. Structured Description

40. Pending Rebate Claim Module (PaCCS) – (this is not part of WeBOC rather Standalone system for liquidation of pending PaCCS 60,000 rebate cases)

HORIZONTAL ROLL OUT

1) Pakistan International Container Terminal (PICT): 16 December 2011 2) Karachi International Container Terminal (KICT): 7 January 2012 3) Qasim International Container Terminal (QICT): 23rd Sept, 2011 4) Imports AFU Karachi: 10 January 2013 5) Export AFU Karachi: 1 January 2013 6) All other AFUs in Pakistan: 25 January 2013 7) Karachi Appraisement (Off dock Terminals): 10 March 2013 8) Karachi Exports (off dock terminals): 10 March 2013 9) NLC & Mughalpura Dry port: 10 January 2013 10) Lahore Dry port, Prem Nagar: 30 January 2013 11) Major Dry ports (Islamabad, Peshawar, Sialkot): 20 January 2013 12) Remaining Dry ports: 15 February 2013 13) Land Customs Stations Wagha: 9 December 2014

NUMBER OF WeBOC USERS

  1. Traders—42442
  2. Custom Agents—2914
  3. Custom Officers—2225
  4. Shipping Lines / Agents—277
  5. Banks—113
  6. Bonded Carriers—46
  7. Airline / Ground Handling Agents (GHA) -- 23
  8. Terminal Operators—18
  9. Off dock Terminals—13
  10. Dry port Terminals—16
  11. Remote Internal—142
  12. Remote External—02

History of Automation[edit]

Federal Board of Revenue (previously Central Board of Revenue) established a company for automation, namely Systems Limited in 1988. Processing was completed on IBM system-34 machine. There were standalone systems in every Collectorate. Goods Declaration (then called B/E - bill of entry) was submitted and a machine number was allocated manually. For this purpose a register was maintained. Data, regarding value was used to be given by the computer operator in the form of an assessment sheet (at this stage some customs brokers managed to get values of their choice as values could be maneuvered by the computer operator). The print out of the sheet was attached with the bill of entry (B/E) and sent to the group in routine. After completion of B/E and out of customs charge, manual feeding in the computer system was done by KPOs of Computer Bureau through batch processing.

In December, 1992 computer processing (online processing) of bill of entries was started in Appraisement Collectorate. Between 1992 and 1999 feeding of hard copies of B/Es in the computer was done by the KPOs of import section. A running number was allocated to B/Es by the computer, which was manually affixed on the B/E. Assessment was used to be made in the relevant groups and simultaneously entry was recorded in the computer. The system automatically calculated duty. A batch of eight bills of entry was forwarded to the bank with a summary. The bank verified that summary with pay orders which they received. Account section was responsible to make consignments out of customs charge after satisfying that all the taxes and duties are paid in the national exchequer.

Pakistan Revenue Automation (Pvt.) Limited (PRAL)[edit]

In June 1994 a new company, owned by Federal Board of Revenue, was established namely Pakistan Revenue Automation (Pvt.) Limited (PRAL) and was incorporated. It took over the earlier company, Systems Limited, in December 1996. The head office was located at 14, Hill Road, F-6/3 Islamabad, Pakistan. As far as I recollect Federal Board of Revenue allocated a budget of Rs. 700 million for PRAL in 2013-14. The purpose of PRAL was to develop in-house soft wares for customs and income tax departments. 1250 persons are employed, out of which 283 are working on customs side and rest on indirect taxation side (income tax and VAT).

In 1996, PRAL purchased a new IBM machine AS-400. To facilitate traders, service centers were started during 1999 in Appraisement Collectorate and then at Port Qasim and Airport, Karachi. Subsequently these were also introduced at some dry ports (ICDs). Processing of B/E was started with feeding of data at service center by 11 computer operators. After that a number was allotted by a small printer. GD processing fee was charged @ Rs. 55/entry between 9 am to 10 am, Rs. 65 between 10 am to 3 pm and Rs. 300 after 3 pm. In 2000, traders started to bring data on floppy discs which were uploaded at service centers. As a result, long queues were minimized to a manageable size.

E-filing[edit]

In 2001 e-filing was introduced. The importer came to service center after sending data of B/E from his office, and a machine number was allocated by service center. In 2004-05 all standalone systems were linked and new software named as "One Customs", became operative, connecting all Collectorates with the mainframe while retaining batch entry system. In 2006 web based machine numbering was introduced.

PaCCS—Pakistan Customs Computerized System[edit]

Pakistan acceded to Revised Kyoto Convention. Consequently, changes were required in the working of customs. A major component was automation and changes in the customs business processes. In Aug 2002, a document called ‘The Vision’ was prepared by R&D cell of Pakistan Customs for modernization of computer system. As a result, services of a foreign company, M/s Agility Logistics (previously known as PWC - Public Warehouse Company), were hired for development of new software named 'Pakistan Customs Computerized System' (PaCCS). The foreign IT Company developed some modules for customs clearance system. It was launched as pilot project in March, 2005. The PaCCS was closed due to various factors. Finally the agreement with M/s Agility was practically terminated in January, 2012 when WeBOC was rolled out at KICT and PICT.

Conceptualization of WeBOC (Web Based One Customs)[edit]

The conceptualization of a new home grown system was started few years back by the department. The new software was named e-Customs. The basic modules of GD filing, examination, clearance and associated jobs were tested. Two customs clearing agents were selected who volunteered to file some Goods Declarations (GD) through the new system. At that time machine number was allocated on filing of GD. Some processes were completed manually, as well. Besides testing the system, actual clearance was made on hard copy of GD after manual checking.

Later, FBR constituted a team of customs officers to review this software. The team identified some basic flaws in new software with reference to customs law and business processes on ground. However, the officers showed reservations and recommended improvements.

Pilot project at Port Qasim[edit]

The software was introduced as pilot project at Port Qasim only for exports in 2011 and few items of imports. A number of problems were faced by the importers and exporters at that time.

See also[edit]

References[edit]

External links[edit]