PAC to examine non-realization, blockade of revenue at Customs stage on March 18th

KARACHI: The Public Account Committee (PAC) scheduled to be held on March 18, 2015 would examine the expenditures, administration, delegated legislation, public petitions and policies of the Ministry concerned and its associated public bodies.

PAC would also peruse the last Departmental Audit Committee (DAC) report of Collectorate of Customs, of which non-realization of revenue due to inadmissible exemptions and concessions for Rs 2.272 billion tops the list.

The last Audit Report of DAC has noted that concessions in duty, exemptions and zero rating of tax notified were admissible subject to fulfillment of certain conditions.

Fourteen Collectorates and two field offices of Director General (I&I), Islamabad, extended the benefit of exemptions and concessions of duties and taxes under certain SROs without fulfillment of conditions which resulted in non realization of revenue for Rs 2.272 billion.

DAC in its last meeting directed the Collectorates to expedite recovery where demand notices were issued and submit detailed reply in cases under examination.

DAC also identified blockage of revenue due to non-disposal of confiscated goods for Rs 1.107 billion. Thirteen MCCs and the sub-offices of the Directors General, Intelligence & Investigation, did not dispose of confiscated goods which resulted in blockage of revenue. Further MCCs Lahore and Islamabad, put the confiscated goods in auction with the delay ranging from 134 to 2568 days after passing of orders-in-original.

The Collectorate has informed the committee that a large number of lots had been auctioned while the rest were included in the upcoming auction schedule to recover legitimate government revenue.

DAC suggested expeditious auction, besides, fixing responsibility against the officers and officials for delaying the process unnecessarily.

Short-realization of revenue due to under valuation of imported goods for Rs356.77 million has also been pointed out by DAC. Eleven Collectorates assessed imported goods either at value lower than that fixed by the Directorate of Valuation Karachi, or by not including the freight, insurance, duties and taxes to arrive at the duty paid value which resulted in short-realization of revenue of Rs 356.77 million.

The Collectorates have responded that some of the recoveries were made and efforts such as issuance of Show Cause notices and recovery notices to secure the government revenue were being made.

DAC directed the department to pursue all cases for early recovery of revenue.

Regarding blockage of revenue due to non-clearance of bonded goods, DAC notes that ten Collectorates did not take action for removal of imported goods from the bonded warehouses after expiry of warehousing period or surcharge was not realized where the goods were removed after stipulated period which resulted in blockage of revenue of Rs 1.247 billion.

The department responded that most of the lots had been cleared on payment of duty & taxes and all hectic efforts were in progress for early disposal of the remaining lots which were included in the coming Auction Schedule.

Non-recovery of adjudged government dues of Rs 2.351 billion was highlighted. Eight Collectorates and Director (I&I) Sukkur did not take appropriate action for recovery of adjudged revenue which resulted in non-recovery of revenue of Rs 2.351. The department responded that recovery proceedings were initiated.

Nine Collectors did not cash the bank guarantees and post-dated cheques despite, the importers failed to fulfill the required conditions which resulted in blockage of revenue of Rs1.117 billion. Department responded that in several cases importers had obtained extensions.

MCCs Lahore, PaCCS and Appraisement Karachi, did not finalize the provisional assessments within the stipulated period. Post-dated cheques and indemnity bonds were not en-cashed/enforced to recover the revenue which resulted in loss of revenue for Rs 152.45 million.

Department noted that recovery proceedings were initiated and DAC would be appraised of further progress in this regard in due course.

The Audit Report has noted that Appraisement Karachi did not recover the adjudged amount of Rs2.532 billion in 396 cases.

The MCC informed that the Collectorate is being effecting recovery of arrear from the different defaulters /organizations / importers. The DAC reiterated its earlier direction to produce the evidence showing percentage increase in the quantum of recovery within 30 days.


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