KARACHI: The R&D of MCC Appraisement East has detected evasion of Rs34.21 million by one M/s Texstyle Corporation on 27 consignments through mis-declaration and under invoicing.
In the contravention report the R&D Appraisement East has recommended re-assessment of all the aforesaid 27 consignments may immediately be arranged to recover the evaded Government revenue amounting to Rs.34.21 millions; examination/assessment alert may immediately be issued to avoid further loss of revenue and adjudication proceedings may also be initiated against the importers and clearing agents against each consignment.
According to details, M/s Texstyle Corporation, Karachi (Yarn Manufacturer) imported a consignment said to contain of 26000 Kgs Cotton Waste Hosiery from Bangladesh and filed a GD for clearance thereof, against declared value of $0.69/Kg and PCT Heading 5202.9900 paying custom duty @5% against SAFTA certificate under SRO-1274(l)/2006 as well as sales tax @2% and withholding tax @1% both under benefit of SRO-1125(l).
The Assessing Group assessed the goods @ $1.00/Kg as per database allowing the aforesaid claimed benefit of duty and taxes. The importers paid the additional amount of duty and taxes.
As a matter of fact and as evident from the placed opposite sample, the impugned goods are 26000 Kgs Cotton Knitted Fabric Rags falling under PCT Heading 6310.9000 attracting custom duty @25%, Sales Tax @ 17 percent and withholding tax @5%.
Exemption of custom duty in excess of 5% is allowed against valid SAFTA certificate. However, exemption of sales tax and withholding tax was wrongly allowed to them despite their non-entitlement.
Besides custom duty at the statutory rate of 25% is also required in the instant case as the claimed exemption (in excess of 5%) cannot be allowed due to the fact that the submitted SAFTA certificate bears wrong description.
It is pointed out that in addition to the instant consignment, M/s Texstyle Corporation, Karachi has imported 27 more consignments.
However, in 5 consignments, the Assessing Group had corrected their wrong declared PCT Heading and finalized the assessment without extending benefit of claimed exemption of sales tax & withholding tax. In the remaining 21 cases, they had succeeded in getting clearance of their consignments availing undue benefit of the aforesaid exemption. Moreover, they could not succeed in evading the Government’s revenue against the instant GD which is withheld by R&D.
The amount of Government revenue evaded by the importers comes to Rs34.21 millions against the aforesaid 27 consignments. Hence, these evaded amounts are to be recovered from the importers.