If Pakistan Customs does not accept the value declared for imported goods, the importer should first identify how Customs reached the higher value. Section 25 of the Customs Act, 1969 sets the valuation methods, while Section 25A allows Customs valuation rulings. Where a Section 25A value is disputed, Section 25D provides a statutory review process.
Quick Facts
- Transaction value is the starting method for valuing imported goods under Section 25.
- Customs cannot treat every invoice value as automatically correct, but another valuation method must have a legal basis.
- Section 25A allows the Director of Customs Valuation to determine values for goods or categories of goods.
- A Section 25A value remains applicable until revised or rescinded by the competent authority.
- The latest consolidated Customs Act published by FBR allows a Section 25D review petition within 30 days of the determination.
- Section 25D states that review proceedings should normally be completed within 60 days.
- An order of the Director General, Customs Valuation under Section 25D can be appealed to the Customs Appellate Tribunal under Section 194A.
Why Are Customs Valuation Disputes Important in Pakistan in 2026?
Customs valuation is receiving renewed attention in 2026.
On August 18, 2026, the Director General, Customs Valuation, said the valuation system was being modernized so that more valuation rulings could be linked with international prices. The stated aim is to reduce discretion, improve price stability, and make valuations more transparent.
Around 50 items were already being valued with reference to international publications and global market prices, according to the Director General. Businesses also raised concerns about recent valuation rulings covering mobile phone accessories and perfumes. Business Recorder’s August 2026 report on Customs valuation modernization
This matters because a higher Customs value can increase the amount on which customs duty and other applicable taxes are calculated.
It can therefore affect:
- landed cost
- working capital
- pricing
- clearance planning
- contractual commitments
- the commercial viability of an import
A valuation dispute is not simply a disagreement over a number. The real legal question is often which valuation method was applied and whether it was applied correctly.
How Does Pakistan Customs Determine the Value of Imported Goods?
The main legal framework is found in Section 25 of the Customs Act, 1969.
FBR explains that the first and most important method is transaction value. In simple terms, this is normally the price actually paid or payable for goods sold for export to Pakistan, subject to the conditions and adjustments set out in the law. FBR guidance on Section 25 and customs valuation
Certain costs may need to be added to the price. These can include freight, insurance, packing and other items specified by law.
If transaction value cannot properly be used, Section 25 provides other methods. These include values based on identical or similar goods, deductive value, computed value and, where necessary, reasonable means consistent with the Section 25 framework.
FBR’s Directorate General of Customs Valuation describes these methods as a hierarchy and states that transaction value should ordinarily be the basis except where the law permits another method. FBR Directorate General of Customs Valuation mandate
When Can Customs Question the Declared Transaction Value?
An invoice is important evidence, but the amount written on an invoice does not end the valuation inquiry in every case.
Customs may examine whether the conditions for accepting transaction value are satisfied. The law also allows officers to seek information and records relevant to an import transaction.
Depending on the case, Customs may look at issues such as:
- the relationship between buyer and seller
- the actual amount paid or payable
- freight, insurance or packing costs
- royalties or licence fees linked to the goods
- payments or benefits connected with the sale
- values of identical or similar goods
- product specifications, quality and origin
The importer should therefore focus on proving the commercial reality of the transaction, not merely producing the same invoice again.
What Is a Customs Valuation Ruling Under Section 25A?
Section 25A allows the Director of Customs Valuation to determine the Customs value of goods or a category of goods after following the methods laid down in Section 25.
Once determined, that value becomes applicable for assessment and continues until revised or rescinded by the competent authority.
Valuation rulings are common across many product categories.
FBR’s August 2026 stakeholder schedule shows Section 25A valuation work involving goods such as raisins, air conditioners and stationery. It also shows Section 25D challenges involving CCTV cameras, float glass, auto replacement parts, submersible motors, perfumes, rubber stoppers and LED parts. FBR schedule of Customs valuation stakeholder meetings
This shows that valuation disputes are not limited to one industry.
Can Customs Ignore Section 25 When Issuing a Section 25A Ruling?
Section 25A itself requires the applicable methods laid down in Section 25 to be followed.
This is important.
A valuation ruling does not make the underlying valuation framework irrelevant. The question remains whether the value was determined using the method permitted by law and on material that properly relates to the goods being valued.
That is why the method used can become central when a valuation ruling is challenged.
What Should You Check If Customs Rejects Your Declared Value?
Before deciding how to respond, identify the exact nature of the dispute.
1. Is there an existing valuation ruling?
Check whether a Section 25A ruling currently covers the goods, brand, origin, specification, or category being imported.
FBR maintains an official Customs Valuation Rulings database.
2. What valuation method has Customs used?
Do not focus only on the final value.
Ask whether Customs relied on transaction value, identical goods, similar goods, market information, deductive value, computed value or another permitted method.
3. Does the material actually match your goods?
Two products can share a broad description but differ substantially in:
- brand
- model
- quality
- grade
- size
- origin
- commercial level
- specifications
- quantity
These differences may matter when comparing values.
4. What evidence supports your declared value?
Useful records may include:
- commercial invoices
- purchase orders or contracts
- banking and payment records
- supplier correspondence
- freight and insurance records
- product catalogues and specifications
- previous import data
- reliable international price material
- evidence relating to comparable transactions
The exact evidence required depends on the valuation method and facts of the dispute.
For a broader checklist of documents that may become relevant during a Customs dispute, see our guide on import and export legal documents in Pakistan.
How Can a Valuation Ruling Be Challenged Under Section 25D?
This is where timing becomes critical.
FBR’s latest consolidated Customs Act describes Section 25D as “Review of the value determined.”
The Director General Valuation may act on his own motion or on a review petition made within 30 days from the date of determination. The Director General may rescind the value or determine it afresh.
The section also states that proceedings should be completed within 60 days from filing of the review petition or initiation of proceedings. FBR’s consolidated Customs Act, 1969
There is a terminology point importers should know.
Some current FBR stakeholder schedules and individual valuation rulings continue to describe Section 25D proceedings as “revision petitions.” The latest consolidated statutory text uses the term “review petition.”
For a live matter, the operative law and the wording of the relevant ruling or order should always be checked before filing.
Can a Section 25D Decision Be Appealed?
Yes.
Under Section 194A of the latest consolidated Customs Act available from FBR, an order passed by the Director General Customs Valuation under Section 25D may be appealed to the Customs Appellate Tribunal.
The Act provides 45 days** from communication of the order** for filing an appeal, subject to the statutory provisions governing late filing and other requirements.
This is important because a Section 25D decision is not necessarily the end of the legal process.
The proper route depends on the order, stage of proceedings, amount involved and legal issues raised.
What Do Recent 2026 Valuation Disputes Show?
Recent cases show why the valuation method and supporting evidence matter.
Used mobile phones
A 2026 valuation ruling for old and used mobile phones was challenged under Section 25D.
The Director General rescinded the earlier ruling and directed the Directorate to reconsider relevant material, including comparable data and international auction prices, before a fresh ruling was issued. Business Recorder report on the 2026 used-mobile valuation dispute
Refrigeration gases
Valuation Ruling No. 2033/2026 concerning refrigeration gases was also challenged.
The Director General rescinded that ruling after identifying legal problems with the valuation exercise and directed a fresh determination in accordance with Section 25 and the relevant rules. Business Recorder report on the refrigeration gas valuation review
Porcelain and glassware
A dispute involving porcelain and glassware went further.
Importers challenged a valuation decision, and the matter reached the Customs Appellate Tribunal. In April 2026, the Tribunal remanded the matter for fresh review. The later valuation exercise considered material presented by importers and manufacturers, including transaction information, export Goods Declarations and market data. Business Recorder report on the Customs Appellate Tribunal valuation matter
These examples do not mean every valuation challenge succeeds.
They do show that valuation rulings and valuation methods can be tested through the remedies provided by Customs law.
Our Take: The Dispute Is Usually About the Method, Not Just the Higher Value
A common mistake is to argue only that:
“My invoice is lower, so Customs must accept it.”
That may not be enough.
A stronger legal review asks:
Why was transaction value accepted or rejected?
Which Section 25 method was then used?
Is a Section 25A ruling applicable to these particular goods?
Does the evidence relied upon properly match the brand, specification, origin and commercial level of the imports?
Has the statutory review deadline started running?
That approach turns the issue from a price complaint into a properly framed Customs valuation dispute.
When Should an Importer Get Legal Help?
Consider professional legal review when:
- Customs rejects the declared transaction value
- an applicable valuation ruling materially increases liability
- the Section 25D deadline is running
- there is a dispute over the valuation method
- Customs relies on data that may not match the imported goods
- a Section 25D order needs to be reviewed for further appeal
- the matter reaches the Customs Appellate Tribunal or another legal forum
Dr. Shahab Imam Law Associates’ Customs Matters practice covers Customs disputes, regulatory matters, and representation based on the facts and applicable law.
The firm’s background is also relevant to this area. According to the firm’s About page, Dr. Shahab Imam previously served in Pakistan Customs, including as Assistant Collector of Customs Appraisement and Deputy Collector of Customs Exports and Export Processing Zone.
Where the issue is operational customs clearance rather than a legal dispute, businesses may also use specialist customs clearance support for import and export through DSI Consultancy Pakistan.
If the matter has moved into a valuation dispute, statutory review or appeal, you can book a legal consultation with Dr. Shahab Imam Law Associates.
Frequently Asked Questions
1. Can Pakistan Customs reject the value on my commercial invoice?
Yes, in circumstances permitted by the Customs Act. Transaction value is the primary method, but it must satisfy the requirements of Section 25. If it cannot properly be used, another statutory valuation method may apply. The reason and method used should be reviewed carefully.
2. What is a Section 25A Customs Valuation Ruling?
A Section 25A ruling determines the Customs value of specified goods or categories of goods. The Director of Customs Valuation must follow the applicable methods under Section 25. The determined value remains applicable until revised or rescinded by the competent authority.
3. How long do I have to challenge a valuation under Section 25D?
The latest consolidated Customs Act published by FBR provides 30 days from the date of determination to make a Section 25D review petition before the Director General Valuation. Because deadlines can affect legal rights, the current law and relevant ruling should be checked immediately.
4. What can the Director General do under Section 25D?
The Director General Valuation may rescind the value or determine it afresh. The current consolidated Act states that proceedings initiated under Section 25D should be completed within 60 days of filing or initiation.
5. Can a Section 25D order go to the Customs Appellate Tribunal?
Yes. Section 194A allows an appeal against an order of the Director General, Customs Valuation under Section 25D. The latest consolidated Act provides a 45-day filing period from communication of the order, subject to the applicable statutory conditions.
6. What documents help in a Customs valuation dispute?
The useful evidence depends on the case. It may include invoices, payment records, contracts, supplier records, freight and insurance documents, specifications, comparable import data and reliable international pricing evidence. Documents should support both the declared price and the characteristics of the actual goods.
Conclusion
A customs valuation dispute in Pakistan should not be approached as a simple argument about whether an invoice price is too low or a Customs value is too high.
The key questions are how the value was determined, which method under Section 25 applies, whether a Section 25A ruling governs the goods, what evidence supports the importer’s position, and which statutory remedy remains available.
Section 25D provides an important review mechanism, but the 30-day period makes early assessment important. A further appeal to the Customs Appellate Tribunal may also be available under Section 194A.
Dr. Shahab Imam Law Associates can provide legal guidance and representation in Customs valuation disputes, review proceedings, and related Customs litigation based on the documents, facts, and applicable law.