KARACHI: MCC Appraisement West has advised MCC Appraisement East MCC Port Qasim to take notice of sales tax evasion on raw and ginned cotton and effect recovery of the sales tax to the tune of millions of rupees.

Raw and ginned cotton was exempted from levy of sales tax vide SRO 551(l)/2008. However, vide Finance Act, 2014, said goods have been subjected to sales tax levy of 5.0 percent on import stage, while exempting SRO was also rescinded vide SRO 573(l)/2014.

During scrutiny of import data of Appraisement (South) it was revealed that despite above detailed legal changes whereby the said levy has been put in place certain importers are still illegally claiming benefit of SRO 1125(l)/2011 and paying sales tax of 2.0 percent instead of 5.0 percent on import of raw and ginned cotton.

The issue of de-linking, in WeBOC software, of SRO 1125(l)/2011 from PCT headings for raw & ginned cotton to thwart any further misuse has also been taken up by the Collectorate.

Appraisement West has is requested that specific instructions be kindly issued to the assessment staff to ensure full levy i.e. 5.0 percent ad val on such imports.

A list of GDs pertaining to Appraisement East and Port Qasim, vide which raw & ginned cotton was cleared at sales tax levy less than 5.0 percent, has also been forwarded the respective collectorates for effecting recovery of the balance amount of sales tax.

Collector Mohammad Saleem has appreciated Additional collector Dr. Iftikhar and Deputy Collector Ghulam Nabi Kamboh for detecting such a huge revenue leakage.

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