KARACHI: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to expedite auction of around 500 non-cleared vehicles stranded at Karachi Port.

The vehicles have been imported under personal baggage, transfer of residence or gift schemes in violation of a statutory regulatory office (SRO) issued by the ministry of commerce.

According to Customs Act, if goods are not cleared from the port within 20 days of arrival, these should be removed from the port and sold in auction.

The FTO’s order states: “Failing to timely arrange auction of vehicles lying un-cleared prima facie is a systemic issue of maladministration and it appears that FBR had failed to put in place a system whereby vehicles cleared from the Port are not timely listed in the Auction Schedule.”

The delay in auction would make most of these vehicles unserviceable due to rusting of bodies, running down of tyres and batteries, pilferage of parts, etc, besides creating congestion at the port.

After the FTO launched an investigation, the department concerned auctioned 167 vehicles but over 500 cars are still awaiting auction.

It was also observed during the investigation that a small number of so-called professional bidders regularly purchased a large number of vehicles and then sold these vehicles on a huge profit in the open market.

It was observed that 62 bidders purchased 167 vehicles auctioned from July to November, while 20 bidders purchased 117 vehicles.

The FTO order says that “perusal of data reflects that some bidders had frequently participated in auctions, thus, casting serious doubts on transparency of the auction proceedings”.

The FBR has recently devised a new “online bidding procedure” to enable people to purchase goods digitally from the customs department. However, it has not yet been implemented as its E-Auction module is under development.

The FTO has recommended to the FBR to ensure the examining of the proposal pertaining to developing of an E-Auction module to expedite disposal of un-cleared consignments.

The FBR has also been recommended to ensure the implementation of the E-Auction Rules notified on Oct 26.

Published in Dawn, December 28th, 2020