Effective rate of duty collection on imports decline despite all efforts

KARACHI: All the efforts of the Customs and directives of the Supreme Court of Pakistan to discourage under-invoicing and mis-declaration have failed to make a significant impact as the effective rate of customs duty collected on dutiable imports during the first eight months of this fiscal (July-Feb 2013-14) has declined to 11.16 percent as against 11.47 percent in the same period of corresponding year in the MCC south Region.
According to the imports and duty/tax collection figures, total dutiable imports in MCC-south stood at Rs962.410 billion and Customs duty of Rs107.494 billion was collected thereon during July-Feb 2013-14 as compared with the dutiable imports of Rs919.902 billion and duty collected thereon of Rs105.535 billion in July-Feb 2012-13.
Although, the mis-declaration and under-invoicing has been checked to some extent but certain procedural loopholes have enabled certain elements to defraud the exchequer otherwise.
It was learnt the Customs Lab has been issuing conformity certificates to the importers enabling them to avail certain exemptions, which are not applicable.
Moreover, the Inland Revenue Service (IRS) is said to have registered commercial traders as manufacturers enabling them to avail certain exemptions, which are not applicable.
Overall, the dutiable imports in the country under One-Customs and WeBOC stood at Rs1,197 billion generating Customs duty of Rs131.064 for the exchequer calculating into the effective rate of 10.949 percent in July-Feb this fiscal as against dutiable imports of Rs1,148 billion and Customs duty collected thereon of Rs127.731 billion, an effective rate of 11.12 percent during July-Feb 2012-13.
MCC Karachi West witnessed highest imports to the tune of Rs313.533 billion on which Customs duty of Rs38.732 billion was collected i.e. 12.353 percent on average in 2013-14 while in the first eight months of last fiscal year MCC Karachi West cleared imports worth Rs176.291 billion on which Customs duty of Rs29.516 billion was collected i.e. 16.74 percent on average.
MCC Karachi East witnessed dutiable imports to the tune of Rs282.22 billion on which Customs duty of Rs29.39 billion was collected i.e. 10.413 percent on average in 2013-14 while in the first eight months of last fiscal year MCC Karachi East cleared imports worth Rs377.09 billion on which Customs duty of Rs37.47 billion was collected i.e. 9.93 percent on average.
MCC Port Qasim witnessed dutiable imports to the tune of Rs260.385 billion on which Customs duty of Rs30.43 billion was collected i.e. 11.686 percent on average in 2013-14 while in the first eight months of last fiscal year MCC Port Qasim cleared imports worth Rs254.873 billion on which Customs duty of Rs29.773 billion was collected i.e. 11.681 percent on average.
The Sales Tax and Income Tax collected by MCC South Region in July-Feb 2013-14 stood at Rs244.792 billion and Rs68.957 billion respectively on the dutiable imports of Rs962.41 billion while in July-Feb 2012-13 the sales tax and income tax, collected on dutiable imports of Rs919.902 billion, stood at Rs202.502 billion and Rs53.999 billion respectively.

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