The Federal Board of Revenue (FBR) has introduced significant amendments to the process of resolving classification disputes through Customs General Order (CGO) No. 02 of 2025. This amendment aims to streamline the dispute resolution mechanism and ensure uniform classification of goods in accordance with international standards.
Routine Classification Management
Under the revised methodology, routine classification matters will continue to be managed at the Collectorate level. However, disputes requiring further deliberation can now be referred to the Classification Centre established at the Collectorate of Customs Appraisement-East, Karachi. This referral process will take place with the approval of the concerned Collector or Director, ensuring a systematic approach to handling classification disagreements.
Role of the Classification Centre
The Classification Centre will play a crucial role in settling disputes, compiling and publishing classification rulings annually, maintaining a database of all rulings, and liaising with the World Customs Organization (WCO) for updated classification guidelines. Additionally, it will contribute to capacity-building efforts by training customs officers on Harmonized System (HS) classifications in collaboration with the Customs Academy of Pakistan.
Structure of the Classification Committee
To effectively manage classification disputes, a three-member Classification Committee has been established. This committee comprises the Collector of Customs, Appraisement-East, Collector of Customs, Appraisement-West, and Collector of Customs, SAPT, Karachi. The Additional Collector (Hqrs) of the Collectorate of Customs Appraisement-East, Karachi, will serve as the Secretary of the committee. Furthermore, the committee can involve officers from other Collectorates, representatives from the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), and relevant trade associations. Specialists and experts may also be consulted for professional opinions on classification matters.
Decision-Making Process
The committee is required to meet at least twice a month, though additional meetings may be held as needed. It is also empowered to conduct online meetings when necessary. The decision-making process will be guided by the Pakistan Customs Tariff, WCO rulings, and other relevant guidelines. Traders and their representatives will have the opportunity to present their cases, and if disagreements arise among committee members, a majority decision will prevail.
Timeline for Dispute Resolution
A key highlight of this amendment is the strict timeline for resolving disputes. Fresh classification disputes must be settled within 120 days, with a possible extension of 30 days if approved by the Chief Collector of Customs Appraisement-South, Karachi. Pending cases must be resolved by August 31, 2025. The Secretary to the Classification Committee is responsible for ensuring timely submission and resolution of cases.
Transparency and Implementation
To enhance transparency, classification rulings will be widely circulated in the form of Public Notices to customs formations, trade bodies, and the FBR. Additionally, any local classification committees operating in various Collectorates or Directorates will be dissolved, with their pending cases transferred to the main Classification Committee. The Collectorate of Customs Appraisement-East, Karachi, will provide logistical and human resource support for the efficient functioning of the Classification Centre.
The amendments introduced through CGO No. 02 of 2025 mark a significant step towards improving classification dispute resolution in Pakistan. By ensuring a structured and efficient approach, these changes aim to facilitate trade, reduce inconsistencies, and align Pakistan’s customs classification procedures with international best practices.
