FBR keeps customs assessments in Islamabad despite industry concerns

The Federal Board of Revenue has ruled out reversing its decision to relocate the Central Appraising Unit from Karachi to Islamabad, maintaining that the transfer is the next stage of its Faceless Customs Assessment programme. The authority said the change forms part of a wider effort to modernise customs administration and make assessment decisions more transparent and system-driven.

The decision follows concerns raised by the All Pakistan Textile Mills Association over clearance delays, valuation disputes and the referral of consignments for laboratory testing. The tax authority responded that much of the performance data cited by the industry body related to the programme’s initial implementation period and did not fully capture subsequent operational improvements.

Official figures show that the average customs clearance time has declined from 40.2 hours to 20.57 hours. The authority said 83% of consignments are now cleared within 48 hours, while acknowledging that genuine bottlenecks still require attention. It pledged to address operational problems without abandoning the programme’s central objectives.

Only the customs assessment function will be transferred to Islamabad. Physical inspections, port operations and other responsibilities will remain with the relevant collectorates in Karachi. Traders experiencing operational difficulties will therefore continue to approach their respective Karachi collectorates for assistance and resolution.

The authority said the faceless system is intended to limit discretionary authority, reduce direct contact between taxpayers and officials and ensure that decisions are based on documented procedures. Customs valuation will continue under Section 25 of the Customs Act, 1969, and digital assessment will not permit officers to increase declared values arbitrarily. Assessing officers will remain responsible for following prescribed valuation methods and recording reasons for their decisions.

Several measures are planned to reduce delays, including dedicated arrangements for clearing backlogs involving Export Facilitation Scheme and export-oriented consignments. Green-channel processing is also planned for Authorised Economic Operators and compliant importers. Proposed service standards include 24 hours for assessment and first review, 48 hours for second review, 24 hours for examination after grounding and 72 hours for laboratory results, supported by automatic escalation procedures.

Provisional release under Section 81 of the Customs Act will be facilitated where legally applicable. The authority has also invited textile representatives and other trade organisations to submit specific, verifiable complaints with the relevant Goods Declaration numbers so that reported delays, classification errors and valuation disputes can be individually examined.

Importers and trade bodies have been urged to file Goods Declarations before vessels arrive. Advance filing and pre-arrival processing could allow eligible shipments to be assessed earlier, reducing the time cargo remains at ports and limiting avoidable demurrage expenses. Electronic records, specialist consultation and digital coordination are also expected to improve assessment quality while reducing unnecessary personal interaction.

The relocation forms part of a broader digital transformation that includes electronic invoicing and artificial intelligence-based production monitoring. The authority maintains that these systems will improve transaction records, expose concealed economic activity and reduce opportunities for preferential treatment. The effectiveness of the Islamabad-based assessment unit will now depend on whether the promised service timelines are achieved without disrupting import and export operations centred in Karachi.