Exchequer suffers loss of Rs1.038 billion due to non encashment of securities

KARACHI: The Departmental Audit Committee (DAC) of Federal Board of Revenue (FBR) has detected loss of government revenue of Rs1.038 billion due to non encashment of securities.
According to DAC audit paras, in MCC, PaCCS, Karachi working under the jurisdiction of Federal Board of Revenue the assessment of imported goods in 610 cases was carried out by the respective group during 2008-2009 either provisional under Section-81 of the Act or under any concessionary notification, securing differential/exempted amount of duty and taxes against Bank guarantee, insurance guarantee, indemnity bond, pay order or post dated cheque of a schedule bank deem sufficient to meet over final determination.
The prescribed period has been elapsed and enforcement of Bank guarantee, insurance guarantee, indemnity bond or encashment of pay order or post dated cheque ripe for encashment. Neither the respective group informed about the determination of the final assessment or about the encashment of securities.
The omission resulted into non recovery of government revenue to the extent of Rs1.038 billion.
The omission was pointed out to the department in October, 2009 but no reply has been received so far.
The Model Customs Collectorate (MCC) submitted in response to the audit paras that the matter was decided in favour of importers by the Hon’able Sindh High Court against which the department has filed appeal with the Supreme Court of Pakistan. Final outcome of the matter would depend upon the judgment of the supreme Court.
The DAC directed the MCC to provide the relevant judgments to Audit for verification by 20.10.2011.
The requisite judgment has been furnished to the DDRA vide letter Nos. MCC/PaCCS /Audit/1354/2011 February 27, 2013.

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