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Vehicles clearance case causing Rs237m revenue loss remains unresolved

Updated Mar 19, 2017 09:14am

ISLAMABAD: After a lapse of over four months, the government has yet to fix responsibility in a case that caused revenue loss of over Rs237 million to the national exchequer.

A detailed investigation report on tax evasion in clearance of vehicles was submitted to the Federal Board of Revenue (FBR) in November 2016.

As many as 2,895 vehicles were cleared at lower duty by 11 model customs collectorates (MCCs) under the smuggled vehicles amnesty scheme-2013, Dawn has learnt.

In the year 2014, the FBR tasked the Directorate of Post-Clearance Audit (Customs) to carry out the audit of 50,876 vehicles which were registered under the tax amnesty scheme.

The then director general of the department, Nadir Hoti had sent a reminder letter to the FBR member customs and chairman to direct the collectorates of customs for early recovery of the evaded amounts.However, the recovery drive was not initiated.The smuggled vehicles amnesty was not been viewed favorably by anybody but for the elite owning smuggled luxury vehicles.

The Federal Tax Ombudsman took suo motu notice on April 1, 2013 of the issue on the basis of information that many ghost vehicles were allowed clearance which were still at the auction stage in Japan and Dubai. The ombudsman also found that almost one third of the vehicles were cleared without physical entry.

The FTO suggested several options to penalize those who were involved in the scam. One was to audit the assessments of the amnesty vehicles to quantify loss of revenue through under-assessment by the Office of the Director General Post Audit (Customs).

To this end a team audited files of 50,876 vehicles registered under the scheme across the 11 model customs collectorates.

According to the findings of the report, the highest numbers of vehicles were registered under the tax amnesty scheme at the Model Customs collectorate, Quetta. Of the total cars of 17,674 registered under the scheme, a discrepancy of an amount of Rs123.38 million was detected in assessment of duty and taxes in as many as 1,510 cars.

The second highest numbers of vehicles were registered at Peshawar Model Customs Collectors which was 17,475. Contrary to Quetta, the lowest evasion in duty and taxes was made at Peshawar collectorate as only Rs7.8m was shortly assessed in clearance of only 65 cars.

At Gwadar customs collectorate, a revenue loss of Rs26.5m was detected in clearance of 455 vehicles as against the total registered vehicles of 2,871 under the vehicle amnesty scheme. In Karachi, as many as 5,507 vehicles were registered under the amnesty scheme. Of these, 556 vehicles were detected which was assessed at a lower duty and taxes which led to a revenue loss of Rs43.72m.

At Faisalabad customs collectorate a total of 1,245 vehicles were registered. Of these 42 vehicles were registered at lower duty and taxes causing a revenue loss of Rs2.8m to the national exchequer.

In Hyderabad collectorate, a tax evasion of Rs2.8m was deducted in clearance of 42 vehicles, followed by an amount of Rs9.5m in Sambrial collectorate in clearance of 78 vehicles, Rs0.6m in clearances of 16 vehicles in Multan, Rs2.2m in clearance of 638 vehicles in Lahore, Rs0.3m in clearance of five vehicles in Gilgit-Baltistan, Rs3.94m in clearance of 22 vehicles in Islamabad.

The total number of vehicles registered under the amnesty scheme in Sambrial was 1156, Multan 1142, Lahore 638, GB 457, and Islamabad 1135, respectively.

Published in Dawn, March 19th, 2017