Islamabad: The Federal Board of Revenue (FBR) has issued a significant notification amending the Customs Rules, 2001, introducing stricter requirements for bidders in customs auctions and establishing a new appellate mechanism for aggrieved parties.
The amendments, notified through S.R.O. 630(I)/2026, were made in exercise of powers conferred under the Customs Act, 1969, the Sales Tax Act, 1990, the Federal Excise Act, 2005, and the Income Tax Ordinance, 2001. The changes specifically target Chapter V of the Customs Rules, 2001.
Mandatory Pre-Auction Inspection
Under the amended Rule 61, clause (d) has been substituted to explicitly require that all goods slated for auction must be made available for inspection by bidders prior to the auction date. This inspection must occur within a timeline approved by the relevant Collector of Customs.
This amendment effectively codifies a bidder’s right to physically examine auctioned goods before placing a bid, aiming to increase transparency in the auction process.
New Undertaking Requirement for Successful Bidders
A new sub-rule (5) has been added to Rule 73, requiring the successful bidder to submit a formal undertaking. According to the notification, this undertaking must confirm that the bidder has physically inspected the goods for which they are bidding. The undertaking is to be submitted in the form set out in Appendix-A to the Chapter.
The prescribed Appendix-A form requires the bidder or their authorized representative to solemnly affirm several key points. They must confirm they have “physically inspected the Goods” and state the date and location of that inspection. Crucially, the undertaking binds the bidder to not raise any objections, claims, disputes, or requests for compensation or auction cancellation at any later stage, whether before or after the bid’s acceptance or delivery of the goods, on the grounds of any alleged discrepancy.
The form requires detailed information, including the CNIC numbers of both the actual bidder and any representative, the bidder’s National Tax Number (NTN), and official stamp.
Right to Appeal Introduced
In a major procedural change, a new sub-rule (3) has been added to Rule 75, creating a formal appeals process. Any bidder aggrieved by an order passed by a Collector under sub-rule (1) now has the right to prefer an appeal before the Chief Collector concerned. This appeal must be filed within fifteen days of the original order.
The amendment mandates that the Chief Collector, after giving the appellant an opportunity to be heard, must decide the appeal within sixty days of its filing.
What the Amendments Mean
Legal experts suggest these amendments are designed to reduce post-auction litigation and disputes. By mandating physical inspection and a binding undertaking, the FBR aims to prevent successful bidders from later claiming they were unaware of the condition of the goods.
The introduction of a time-bound appeal process before the Chief Collector provides a clear, hierarchical remedy for bidders who feel unfairly treated by a Collector’s order, potentially streamlining dispute resolution and reducing the burden on higher courts.
The notification, dated September 18, 2026, follows a prior publication of the draft amendments on September 10, 2026, as required by law.
