ISLAMABAD: Pakistan’s Directorate General of Customs Valuation, Karachi, has introduced a revised mechanism for determining the customs value of imported coal, replacing the previous valuation arrangement with a system linked to international market prices.
Under the new framework, the customs value of coal imported from any country will be calculated using internationally published Argus price assessments, with actual freight charges added to determine the applicable valuation.
The revised arrangement was formally notified through Valuation Ruling No. 70/2026, issued on October 12, 2026.
The ruling replaces Valuation Advice No. 01/2023, which was issued by the Directorate of Customs Valuation, Quetta, on September 12, 2023.
According to the notification, the revised valuation mechanism will apply to coal imports from all countries and will remain in force unless it is withdrawn or amended under the Customs Act, 1969.
Customs Values to Reflect International Coal Prices
The new ruling establishes a market-linked valuation system for coal classified under Pakistan Customs Tariff codes 2701.1200 and 2701.1900.
For imports falling within these categories, customs authorities will determine the assessable value by adding actual freight expenses to the relevant Argus benchmark price.
The applicable international price will be determined according to the date of the importer’s letter of credit.
This approach replaces the earlier valuation arrangement with a mechanism designed to reflect movements in international coal prices.
The Directorate explained that the revision became necessary because of changes in global coal markets, which had affected the relevance of previously established customs values.
Stakeholders Support Market-Based Valuation
Before issuing the new ruling, customs authorities reviewed the existing valuation framework and consulted representatives associated with coal imports.
A stakeholder meeting was held on October 5, 2026, during which participants recommended linking customs values to the Argus international benchmark.
They argued that a market-based reference would provide a more accurate reflection of changing international prices than a predetermined fixed customs value.
Following the consultation, the Directorate examined published Argus assessments and compared them with the customs values previously applied to imported coal.
Officials also analysed import records covering the preceding 90 days to evaluate declared import prices and identify recent trends in coal shipments.
The review concluded that Argus provided a recognised international pricing reference that responded to changes in market conditions.
Customs authorities therefore considered it an appropriate benchmark for determining the value of imported coal.
Legal Basis for the Revised Valuation
The Directorate stated that it had examined the valuation procedures prescribed under Section 25 of the Customs Act, 1969, before establishing the new rates.
These procedures were considered in the sequence required by law.
However, the transaction value method could not be applied because the information necessary for its use was unavailable.
Similarly, the methods based on identical and similar imported goods were found unsuitable.
According to the Directorate, the available import records from the previous 90 days reflected international coal prices that had subsequently changed, limiting their usefulness for determining current customs values.
As a result, the Directorate exercised its authority under Section 25A, read with the proviso to Section 25A(1), of the Customs Act, 1969, to establish the revised valuation mechanism.
New Framework to Remain Effective Until Further Revision
The revised system introduces a direct relationship between international coal prices and the customs values applied to imports entering Pakistan.
By using the Argus benchmark applicable on the letter-of-credit date and incorporating actual freight costs, customs authorities will determine valuations according to the methodology specified in the new ruling.
The arrangement applies regardless of the country from which the coal originates, ensuring that imports covered by the specified tariff classifications are assessed under the same valuation framework.
The ruling will remain applicable until customs authorities issue a subsequent revision or withdraw it in accordance with the relevant provisions of the Customs Act.
The decision marks a shift towards internationally benchmarked customs valuation for coal imports, replacing the previous arrangement with a mechanism intended to respond more closely to changes in global coal prices.
