KARACHI: The Customs Appellate Tribunal Karachi has ordered M/s Suraj Fertilizer Industries Limited to pay the additional demand created by MCC Appraisement, as the importer had this amount taking undue benefit of certain exemptions.

According to details, credible information was received regarding payment of advance income tax at a reduced rate of 3% instead of 5% on import and clearance of goods by various importers enjoying exemption of Sales Tax under Sixth Schedule of the Sales tax Act, 1990 and SRO 551(l)/2008. As per the Income Tax Ordinance, advance tax shall be collected at the rate of 3% on the import value of raw material imported by an industrial undertaking for its own use.

Post import audit scrutiny of the imports carried out by M/s. Suraj fertilizer Industries, was conducted and it was found that the company paid advance income tax at the reduced rate of 3% on import instead of leviable statutory rate of 5% payable on clearances of these goods. Thus an amount of Rs 1.996 million was found short paid/ recoverable on account of AIT along with default surcharge to be calculated at the time of payment.

The Additional Collector MCC Appraisement Karachi ordered recovery of short-paid amount along with surcharge.

Dissatisfied with the order, the importer approached Collector Appeals who upheld the judgment of Additional collector. The importer then approached Appellate Tribunal.

Member Judicial-II, Adnan Ahmed perused all the aspects of the case and noted that the record revealed that importer paid advance income tax at the rate of 3% on import of fertilizer instead of leviable statutory rate of 5% payable on clearance of imported goods.

In concurrent findings it was held the amount of Rs. 1.996 million found short paid which is recoverable from importer. The tribunal dismissed the appeal filed by M/s Suraj Fertilizer Industries.