The Federal Board of Revenue’s (FBR) Customs Classification Committee has applied 11% of customs duty to the import of “4G MiFi modem and Mobile WiFi modem.” The decision was applied following the findings of the Customs Classification Committee.
The Committee decided that the “4G MiFi modem and Mobile WiFi modem” should be accurately classified under the Pakistan Customs Tariff (PCT) heading 8517.6220.
This decision resolves the confusion previously caused by the Directorate of Post Clearance Audit (Central) Lahore, which incorrectly applied customs law to the import of “Mobile WiFi modem,” according to reports, creating significant issues for importers.
The Directorate of Post Clearance Audit (Central) Lahore had given this issue of classifying “Wi-Fi/Mi-Fi devices” to the Classification Committee to determine the correct classification under the Pakistan Customs Tariff.
According to media reports, the Directorate of Post Clearance Audit (Central) Lahore reviewed import data from various telecom companies between 2015-2017 and found that “Wi-Fi/Mi-Fi modems” were being incorrectly classified under PCT heading 8517.6220, instead of the correct classification under heading 8517.6940 as “subscriber end equipment.”
Based on this finding, the Directorate issued an audit observation to the importers and 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 ruled in favor of the customs authorities.
The importers appealed the decision to the Customs Appellate Tribunal, which then referred the case to the Customs Classification Committee to determine the correct classification.
The Pakistan Telecommunication Authority (PTA) noted that the term “Subscriber end equipment” is broad and can include a wide range of end-user devices, regardless of their specific functionality. This broad classification does not accurately represent the precise and specific functions of Wi-Fi/Mi-Fi modems, which primarily deal with data processing and transmission.
The Classification Committee’s decision is also supported by the principles of the General Rules for the Interpretation of the Harmonized System (GRIs 1 and 3(4)). These rules 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 category of “subscriber end equipment.”
Therefore, the Customs Classification Committee concluded that the “4G MiFi modem and Mobile WiFi modem” should be classified under PCT heading 8517.6220.