KARACHI: The Directorate of Post Clearance Audit (PCA) Karachi has served audit observations on two different LED lights importers for short-paying duty and taxes through claiming concessions not applicable to them.

According to details, M/s Khaliq Enterprise imported a consignment declared to be “SMD / LED surface mounted panel lights of different watts” and declared PCT heading 9405.1090 through MCC Appraisement (West), and claimed the benefits of Fifth Schedule (Customs duty) Part I-24, Sixth Schedule (Sales Tax) and Income Tax at zero percent. The exemptions are only available to SMD, LEDs with or without ballast with fittings and fixtures for promotion of the renewable energy technologies.

Income Tax Ordinance, 2001 is more restrictive and allows exemption to items with dedicated use of renewable source of energy, which includes like solar and wind power resources only.

The Federal Board of Revenue (FBR) has clarified that the said Schedule is for renewable energy technologies for LEDs with or without ballast with fittings. The imported goods are not meant for work with the renewable energy sources like Solar Energy or Wind.

Therefore, the concessions under the claimed notifications are not available to the subject imports. M/s Khaliq Enterprise is advised to pay a total short levy of Rs2.743 million.

Similarly, M/s Feroze 1888 Mills Limited imported goods declared to be “T8 LED Tube 18w, LED Bulb, LED Floodlight 10-100w, LED Streetlight 40w etc.” and declared PCT heading 9405.1090 through MCC Appraisement (West), and claimed the benefits of Fifth Schedule (Customs duty) Part I-24, Sixth Schedule (Sales Tax) and Income Tax at zero percent.

Therefore, the concessions under the claimed notifications are not available to the subject imports and M/s M/s Feroze 1888 Mills Limited is advised to pay a total short levy of Rs8.886 million.

M/s Feroze 1888 Mills Limited is