KARACHI, May 31: The Directorate General of Intelligence and Investigation of Central Board of Revenue (CBR) has unearthed duty and tax evasion to the tune of Rs55 million on imports of auto parts and other goods cleared and processed by Customs Administrative Reform (CARe) working under Model Customs Collectorate (MCC).
Lately there had been sudden rise in tax and duty evasion at customs level particularly through the tampering of computer systems working under CARe. As a result of this revenue collection on account of customs duty had been lagging behind by around 8 per cent over the corresponding period of last year.
There had been complaints that large-scale mis-declarations of description and value of imported goods were being cleared through CARe causing millions of rupees loss to the national kitty. Importers and their agents also accused the system operators for tampering with computers to change the description and value of imported goods.
On a number of occasions the customs intelligence had unearthed such cases and put forward to the relevant authorities with all evidences but so far no concrete measures had been taken to check such leakages and mis-declarations of goods.
Undoubtedly CARe has facilitated rapid and hassle-free clearance of goods through electronic system and some checks and balance should also be introduced to avoid tampering with the system, a member of Karachi Customs Agents Group told Dawn.
According to a document of the Customs Intelligence dated May 17, 2007, which was made available to Dawn, evasion of Rs55 million on account of non-application and misuse of various rules laid down under different SROs were detected on import of auto parts and some other goods.
The customs intelligence had also pointed out a number of discrepancies made while clearing these goods through Pakistan Automated Customs Clearance System (PACCS) causing millions of rupees in revenue loss.
The document reveals that evasion of Rs24.26 million took place due to non-payment of additional duty as leviable on auto parts under SRO-693(I)/2006 dated July 1, 2006. It has further stated that in majority of cases additional duty has not been charged although the goods declaration clearly mentioned the relevant Pakistan Customs Tariffs (PCTs).
In another case the customs intelligence has also unearthed evasion of Rs21.10 million on account of allowing exemption of duty under SRO-567(I)/2006 dated June 5, 2006. However, it has been further pointed that the duty was subsequently withdrawn through an amendment incorporate on the issuance of SRO-663(I)/2006 dated 26.06.2006 and SRO-1075(I)/2006 dated 27.10.2006 (effective from 14.10.2006).
The national chequer has also suffered a loss of Rs9.64 million as some of imported consignments have been cleared against zero-rating of sales tax under SRO-530(I)/2005 dated 06.06.2005, read with SRO-70(I)/2006 dated 28.02.2006. These goods were cleared at zero rating of sales tax in violation of CBR’s instructions issued through its letter C.No.5/8-STB/2005 dated 03.04.2006.
The Directorate General of Intelligence and Investigation has asked the CBR to initiate appropriate action or adjudication proceedings for recovery of the escaped revenue as per PACCS procedure under the relevant provisions of the Customs Act, 1969, and Sales Tax Act, 1990.