The Principal Partner, Maritime and Commercial Law Partners, Apapa Lagos, Barr. Osuala Emmanuel Nwagbara has called on the Nigeria Customs Service to jettison the benchmark method of valuation as well as all arbitrary value method of arriving at the duty payable on imports as it adds to the high cost of doing business in the port.
Barr. Nwagbara who made this call while presenting a paper titled,” Towards A New Port Order: The Journey So Far- A Lawyer’s Perspective” at the 1st Shippers’ Day Celebration, organized by the Shippers’ Association of Lagos State (SALS) in Lagos last weekend, stated that the idea of using arbitrary or fictitious valuation method runs contrary to the provisions of Article VII of GATT which Nigeria was signatory to.
He recalled that the Customs and Excise Management (Amendment) Act No. 20 of 2003, provided that customs duty should be determined sequentially by reference to six method which included; transaction method, identical method, similar value method, computed method, deductive method and fall back method wondering why the service would not conform itself to these six as provided for.
According to him,” the simple explanation of the provisions of Act No. 20 of 2003 is that duty on imported goods shall be based on value stated by the seller on the seller’s invoice and such invoice is usually authenticated by the exporting countries’ Chamber of Commerce. This is the meaning of method one”.
“Where there is good reason to doubt the veracity of the value stated on the invoice of the seller, then recourse is had to the value of identical goods from same country of import, of same quantity, within a maximum time lag of three months, etc, all in a bid to determine value so as to have the appropriate customs duty charged on the imports. This sequential method should continue where applicable until the last (6th) method is attained”.
“However, the Nigeria Customs Service at the moment uses what may be described as “Benchmark method of valuation” of import or arbitrary method in order to arrive at the duty payable on such import. All that is done now in many cases is to allot particular type of import of particular packing unit, say container of Sanyo TV, without reference to the invoice value of the seller from the country of import and so every container of Sanyo TV is assessed to customs duty at the same value or the Nigerian Customs Serviceman may just apply his discretion as to what he feels the value of a particular import should be and then base the duty assessment on that discretion value”.
“This valuation method is arbitrary or fictitious and runs contrary to the provisions of Article VII of GATT. This again adds to the high cost of doing business in our ports. There is need for Nigeria to implement the provisions of Act No. 20 in the spirit of trade facilitation among WTO member countries”.
Responding, the Customs Area Controller (CAC), Apapa Area Command of the Nigeria Customs Service, Comptroller Charles Edike averred that the Service usually argue over value with importer or his agent who put in value he felt he bought the item in question.
Edike observed that on the assessment of the item by any customs officer, if he suspected that there was something the importer or his agent as the case may be was hiding, the service would not hesitate to ask the importer or his agent to pay the correct value before releasing the item to him.
He said,” after you have bought your consignment, then they give you discount and you pay them but the discount you accepted, is it an allowable or unallowable discount? If it is unallowable discount, we look at it and say no, the discount is not allowed and therefore, come and pay the difference”.
“Then if you have gone to buy say maybe from Michigan, there is no port in Michigan that means you have to transport the item from Michigan to Houston. If the price you transported that item from Michigan to Houston is not there, we will say no, this price, you did not put it there”.
“The cost of packaging, you didn’t put there. Now there are times when somebody will bring in say TV but he keep telling us TV, is it colour or black and white? Or is it Plasma or LG? What is the size? Is it 20 inches, 40 inches or is it 70 inches? You must classify it. These are the things we look at and we begin to tell you no, you have not paid what you are supposed to pay to the government”.
He however stated that while arguing with the trader on the actual value of the import, the service could allow the trader to pay with bank indemnity and his goods would be released to him while investigation on the actual value continued.
“By the time we found out that you are right, we will apologize to you but if you are wrong, we will get you to pay the balance”, Edike stated.
