KARACHI: The Directorate of Post Clearance Audit has observed duty evasion/short payment of around Rs30 million and served Audit Observations on several importers/companies.
These importers/companies include M/s Bin Qasim Packages Karachi, M/s Burq Polyfabric PCt Ltd, M/s Diamond Poly Pvt Ltd Lahore, M/s Jilani Poly Industries Karachi, Ommi M/s Polymer Karachi, M/s Poly Pak Pvt Ltd Lahore, M/s Prime Polytex Pvt Ltd Peshawar, M/s Reliance Sacks Lahore, M/s Imran Enterprises Karachi, M/s Mian Nazir Industries and two others.
During the scrutiny of import data of coated Calcium Carbonate (PCT heading 3824.9094 and 3824.9099) it has been observed that certain grades of Coated/treated Calcium Carbonate falling under PCT heading 3824.9099 chargeable to CD 10 percent have been cleared by the importers by mis-declaring them under PCT heading 3824.9094 chargeable to CD 5.0 percent to evade duty/taxes.
It is pertinent to mention that Coated or treated Calcium Carbonate is imported mainly in two forms i.e. in the form of fine white powder with its surface coated or treated with fatty substances or wax. In this form, a thin coating is made on particles of calcium carbonate by wax or other fatty substance due to which its substantive characteristics/composition and use is not changed.
In the form of white granules consisting essentially of calcium carbonate dispersed in polyethylene plastic medium having Calcium Carbonate 80 percent and plastic medium 20 percent. In this form, according to the available literature as well as Lab reports, the composition and characteristics of the substance are changed resulting into changing of its use as well.
This fact has also been endorsed by Customs Chemical Testing Lab as well as assessment groups in a number of cases where it has been recommended that Coated/Treated Calcium Carbonate in granular form with 20 percent coating of plastic medium may be classified under PCT heading 3824.9099 instead of 3824.9094.
However, it has been observed that certain importers, willfully and knowingly, instead of mentioning exact PCT heading of such grades have got these cleared under heading 3824.9094 using green channel system; in order to evade duty/taxes.
The above mentioned importers have been advised to pay a total of Rs30 million into the exchequer, of which Rs2.2 million have already been recovered.
The detections made by the Directorate of Post Clearance Audit led by Director Gul Rehman have been quite instrumental in checking revenue leakage as after the detection, all the collectorates are keeping checking on the imports so that inadmissible use of concessions and mis-classification could be avoided.
PCA also found short-payment of duty by SSGC under SRO 678, which was causing a loss to the exchequer. SSGC was paying 5.0 percent tax instead of 20 percent.
Similarly, audit observations were served on 35 importers for availing inadmissible concessions on the import of LED lights. Now, this revenue leakage has been plugged.