September 03, 2008	Wednesday	Ramazan 2, 1429

ISLAMABAD, Sept 2: The customs department has no information about 250 containers of imported goods cleared through an automated system without proper assessment of duty and taxes because of flaws in the software.

Sources told Dawn that the directorate of customs intelligence had sent a letter to the Chinese customs department seeking details of the goods and their value. The clearance without proper duty assessment is believed to have caused the government Rs1 billion revenue loss.

The sources said that the government seemed unwilling to do anything about the flaws in the software of Pakistan Customs Computerised System (PACCS).

Four to five persons have been arrested so far in this regard, but not a single penny has been recovered, nor any action has been taken against the officers of the PACCS for their alleged failure to check the improper clearance of goods.

The matter was reported by an informer and not detected by the PACCS which showed that the computerised system was helping unscrupulous importers to evade duty and taxes.

It is alleged that the containers were released on forged documents by terminal operators who under the customs law are custodian of non-duty paid goods.

An official document available with Dawn shows a number of flaws in the software, which starts from registration process, user management module, risk management module, assessment module, valuation, payment module, vessel management module, container management module, terminal operators, etc.

The sources said that a report sent to the Federal Board of Revenue calling for necessary action had been put in the cold storage. Some officers of the customs department were allegedly against the plugging of holes in the system.

Under the computerised system, the registration is allowed simply on providing CNIC and NTN. There is no requirement to check bank details, past history or registration with trade bodies. The system has enabled people to get registration on the CNIC of housewives, irrelevant persons, and even people who are dead.

According to the report, the working of risk management system (RMS) is not transparent. Even the member customs, chief collector and project director are unaware of the formula, risk factors and scores/weights used in the RMS.

Details of the RMS are known only to software developers and some junior officers who were involved in creating the system and remained attached to the project team. This creates dependency on these people, giving them a free hand to manipulate the system without any fear of detection.

The assessment module allows the filing of GDs (goods declared) by one importer against the bill of lading of any other importer, which opens up a wide avenue for malpractices. The system does not cross-check details given in the GD with those in the bill of lading or manifest nor flags any erroneous figures, such as extremely low or high weights or values.

Important notifications remained omitted from the system for a long time. For example, a 2 per cent sales tax on commercial importers was not changed. Also, regulatory duty on export of metals/ores was not charged.

The report shows that the defect in calculation mechanism leads to situations such as double calculation of sales tax on certain goods. In such cases, instead of correcting the software, the assessing staff is advised to reduce the sales tax rate in order to compensate for the erroneous calculation. There is no manifest clearance module in the system, a basic requirement of customs clearance. It is practically impossible to obtain vessel-wise lists of containers.