The Directorate General of Customs Valuation (DGCV) of Pakistan has drastically increased customs duty with an average of over 400 per cent on unbranded garments. This has forced commercial importers to find other illegal means to bring imported attires into the country.

According to market sources, an unprecedented increase in customs duty with an average of over 400 per cent on unbranded garments as compared to previous valuation ruling is compelling importers to divert around 175 containers which was grounded at Karachi port to UAE for bringing all these containers under the guise of Afghan Transit Trade (ATT) cargoes into the country.

However, sources have ruled out the possibility of any negative impact on import of garments after duty increase, saying that all garments consignments would now enter into the country under ATT cargoes. Moreover, they said that this initiative would create negative impact on customs revenue collection besides encouraging smuggling and corruption. In short, the customs department may be deprived of collecting revenue of over Rs 1.5 billion from garments importers.

Meanwhile, a customs official who was closely involved in evolving this new valuation ruling, on condition of anonymity, said that department did not increase customs duty on unbranded garments but did rationalise its value as per international prices.

Moreover, he said that this was the first time when the department had taken Pakistan Readymade Garment Exporters and Manufacturers Association (PRGEMA) on board for rationalising the valuation of unbranded garments as per international prices adding that this new valuation ruling would also protect local garment industry.