The Federal Board of Revenue’s (FBR) Customs Classification Committee has ruled that a customs duty of 11% will be applicable on the import of “4G MiFi modem and Mobile WiFi modem”. This decision was made based on the findings of the Customs Classification Committee.
The Classification Committee concluded that the “4G MiFi modem and Mobile WiFi modem” should be correctly classified under the Pakistan Customs Tariff (PCT) heading 8517.6220.
This decision resolves the previous confusion created by the Directorate of Post Clearance Audit (Central) Lahore, which had incorrectly applied customs law on the import of “Mobile WiFi modem”, causing serious problems for importers.
The Directorate of Post Clearance Audit (Central) Lahore had referred the matter of classifying “Wi-Fi/Mi-Fi devices” to the Classification Committee to determine the appropriate classification under the Pakistan Customs Tariff.
The Directorate of Post Clearance Audit (Central) Lahore had reviewed the import data of various telecom companies from 2015-2017. They found that “Wi-Fi/Mi-Fi modems” were being incorrectly classified under the Pakistan Customs Tariff (PCT) heading 8517.6220, instead of the proper classification under heading 8517.6940 as “subscriber end equipment”.
Based on this finding, the Directorate issued an audit observation to the importers. They then forwarded a contravention report to the Collector of Customs (Adjudication) Lahore, under Section 179 of the Customs Act 1969 and SRO 886(1)/2012.
The Adjudication Authority then issued a Show Cause Notice and passed an order in favor of the department (the customs authorities).
The importers appealed the matter to the Customs Appellate Tribunal. The Tribunal, in turn, referred the case to the Customs Classification Committee to determine the proper classification.
The Pakistan Telecommunication Authority (PTA) pointed out that the term “Subscriber end equipment” is broad and can encompass a wide range of end-user devices, regardless of their specific functionality. This broad categorization does not accurately reflect the precise and specific functions of Wi-Fi/Mi-Fi modems, which are primarily involved in data processing and transmission.
The Classification Committee’s decision is further supported by the principles of the General Rules for the Interpretation of the Harmonized System (GRIs 1 and 3(4)). These principles state that goods should be classified based on their specific descriptions rather than more general ones. In this case, the function-based description under PCT heading 8517.6220 is more accurate and specific compared to the broader, less defined category of “subscriber end equipment”.
Therefore, the Customs Classification Committee concluded that the “4G MiFi modem and Mobile WiFi modem” are correctly classifiable under PCT heading 8517.6220.
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