The Customs Classification Committee of the Federal Board of Revenue (FBR) has determined that an 11 percent customs duty will be applicable on the import of 4G MiFi modems and Mobile WiFi modems. This decision follows a ruling issued by the Collectorate of Customs Appraisement (East) Karachi, based on the findings of the Customs Classification Committee.
The committee concluded that the “4G MiFi modem and Mobile WiFi modem” should be classified under the Pakistan Customs Tariff (PCT) heading 8517.6220. This decision came after the Directorate of Post Clearance Audit (Central) Lahore referred the matter to the committee for the proper classification of Wi-Fi/Mi-Fi devices according to the Pakistan Customs Tariff.
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According to the facts provided by the Directorate, a review of clearance data from 2015-2017 for imports made by various telecommunication companies in Lahore revealed that Wi-Fi/Mi-Fi modems were being incorrectly classified under PCT heading 8517.6220 instead of the correct PCT heading 8517.6940, which pertains to subscriber-end equipment. This misclassification led to an audit observation being issued to the importer, followed by a contravention report submitted to the Collector of Customs (Adjudication) Lahore under Section 179 of the Customs Act 1969, in conjunction with SRO 886(1)/2012 dated July 18, 2012.
The Adjudicating Authority issued a Show Cause Notice and subsequently passed Order-in-Original No. 27/2018 in favor of the department.
After a thorough review of the arguments presented by both the importer and the department, as well as a detailed examination of the relevant provisions of the Pakistan Customs Tariff (PCT) and the General Rules of Interpretation (GRIs), the Classification Committee determined that the proper classification of “4G MiFi modem and Mobile WiFi modem” is indeed under PCT heading 8517.6220. This heading specifically addresses devices designed for the reception, conversion, transmission, or regeneration of data, which are key functions of Wi-Fi/Mi-Fi modems.
The Pakistan Telecommunication Authority (PTA) also clarified that the term “subscriber-end equipment” is broad and can apply to various end-user devices. However, this broad categorization does not accurately reflect the specific functions of Wi-Fi/Mi-Fi modems, which focus on data processing and transmission. The committee’s decision is further supported by the principles of GRIs 1 and 3(a), which prioritize specific descriptions over general ones.
In conclusion, the Classification Committee affirmed that the “4G MiFi modem and Mobile WiFi modem” are correctly classified under PCT heading 8517.6220, confirming the applicability of the 11 percent customs duty.
