FBR to tighten baggage rules following Customs' call to stop scheme misuse

Karachi's customs authorities have called on the Federal Board of Revenue (FBR) to overhaul baggage rules to curb the widespread abuse of the current system and to introduce the "Overseas Pakistanis Door to Door Service Rules 2024" aimed at aiding overseas Pakistanis.

This move comes after the Federal Tax Ombudsman (FTO) identified significant misuse of the baggage scheme, where high-value luxury goods were being imported in the guise of personal baggage, often involving collusion with customs officials.

The FTO's directive seeks to redefine what constitutes a commercial quantity of goods to better distinguish between regular personal effects and items brought in for commercial purposes.

The current regulations under SRO 666(I)/2006, which govern unaccompanied baggage, are deemed inadequate in preventing the import of goods in commercial quantities under the facade of personal and household effects.

An investigation initiated by the FTO revealed instances of goods being cleared with minimal duty and taxes, exploiting the passports of overseas Pakistanis with limited financial means.

These practices not only undermine the integrity of the baggage system but also result in significant economic losses.

The customs authorities' recommendations include amending the definition of commercial quantity to prevent misdeclaration and misuse of the baggage scheme.

The Directorate General of Intelligence and Investigation, Customs in Karachi, has also echoed similar concerns, highlighting the need for stringent measures to ensure that the import of goods through baggage does not circumvent import restrictions and foreign exchange limitations.

In response, the Collectorate of Customs Enforcement (Ports), Karachi, has taken steps to improve the clearance process, resulting in a noticeable reduction in complaints related to the import of commercial quantity goods as personal baggage.

The FBR is now tasked with reviewing and implementing the proposed changes to the rules and procedures to mitigate misuse and facilitate genuine overseas Pakistanis.