FBR’s Import Blunders Cost Rs. 356 Crore: Audit

Pakistan’s customs authorities suffered revenue losses exceeding Rs. 3.56 billion due to the incorrect classification and undervaluation of imported goods, according to a new audit report that identified widespread irregularities across multiple Federal Board of Revenue (FBR) field offices.

The audit found that 16 FBR field offices incorrectly classified 7,585 import consignments using inaccurate Pakistan Customs Tariff (PCT) headings, resulting in the short collection of more than Rs. 2.35 billion in customs duties and taxes.

The report said imported food products, mobile phone pouches, power cables, printing ink, auto parts and several other goods were cleared under incorrect tariff classifications, allowing importers to pay lower duties.

Separately, the audit identified 2,246 cases across 17 FBR field offices where imported goods were cleared after being declared at values below their actual worth. This practice led to an additional short collection of more than Rs. 1.20 billion in customs duties and taxes.

According to the report, household appliances, watches, soap, cosmetics, tea, fabrics, solar inverters and mobile phone covers were among the products cleared using undervalued import declarations.

The audit concluded that failure to implement Customs Valuation Rulings caused significant losses to the national exchequer and weakened the effectiveness of customs enforcement.

The report noted that the department has recovered only Rs. 2.5 million so far, while recoveries exceeding Rs. 810 million remain under process. Cases involving more than Rs. 1.46 billion are still pending at various stages of proceedings.

It also revealed that the department challenged cases worth more than Rs. 1.27 billion but failed to present sufficient evidence to support its position.

The Departmental Accounts Committee (DAC) directed the authorities to accelerate recoveries and submit comprehensive reports on pending cases. The audit further recommended disciplinary action against responsible officials and called for stronger post-release verification mechanisms to prevent similar violations.

The report warned that customs misclassification and import undervaluation have repeatedly appeared in audit findings over several years, describing the continued recurrence of the same irregularities as a matter of serious concern.