In a move set to impact the cost of imported cosmetics, the Directorate General of Customs Valuation Karachi has announced an increase in customs values on high-end branded color cosmetics from all origins.
This development is expected to result in a rise in prices for these products, affecting consumers and importers alike.
The Directorate General of Customs Valuation Karachi issued Valuation Ruling 1809 of 2023, marking a shift in the customs values for color cosmetics.
This decision stems from a need to realign the values with current international market trends, as previously established under Valuation Ruling No. 1404/2019.
Stakeholders, including importers, played a significant role in prompting this review. They expressed concerns that the existing values of some high-end cosmetic brands were considerably higher than international market prices. Consequently, an exhaustive exercise was conducted to ascertain new values for these cosmetics.
Data collection and market inquiry
To arrive at these new customs values, the Directorate conducted a thorough market survey, visiting various wholesale and retail markets to assess the actual prices of color cosmetics of different origins. In addition to this, a 90-day clearance data analysis was carried out and subsequently cross-examined against market inquiries in accordance with Directorate's Office Order No. 17/2014.
Furthermore, an examination of the valuation method outlined in Section 25(8) of the Customs Act, 1969 was conducted. However, due to the unavailability of conversion cost data from exporting countries, this method could not be employed.
Eventually, customs values for Color Cosmetics were determined under sub-section (7), read with Section 25(9), of Section 25 of the Customs Act, 1969.
Standard packing weight
Under the new customs values, assessments will be based on the standard packing weight/piece as outlined in the ruling. Items with a weight different from the standard will be assessed on a prorata basis.
Importantly, it should be noted that these new customs values do not apply to imports made directly by multinational companies like Unilever, L’Oreal, Johnson & Johnson, etc., from their sister concerns of the same name. These consignments will be assessed under the provisions of Section 25 of the Customs Act, 1969 and will be closely monitored for any anomalies.
In the case of products imported in the form of gift sets, they will be assessed according to the PCT (Pakistan Customs Tariff) of each item within the set.
This change in customs values is expected to have a direct impact on the pricing and affordability of high-end color cosmetics for consumers and may pose challenges for importers dealing in these products. Importers and consumers alike will closely watch the market as these changes take effect.
