PCA serves contravention report against Lyallpur Chemicals and Fertilizers

KARACHI: The Directorate of Post Clearance Audit (PCA) has prepared a contravention report against M/s Lyallpur Chemicals and Fertilizers Limited for evading leviable taxes through claiming inadmissible  benefit of concessionary SRO No.551(I)/2008.

According to the details of the case, scrutiny and audit of import data found that M/s Lyallpur Chemicals and Fertilizers Limited imported a consignment vide under PCT heading 2510.1000 through MCC Appraisement (West) said to contain “Natural Rock Phosphate 30% Un-Ground” and got the consignment cleared on payment of 1.0 percent Income Tax, by claiming SRO 551(I)/2008.

The claimed SRO for Sales Tax exemption is not covered under zero rating regime of Sales Tax for payment of Income Tax at the rate of 1.0 percent. The importers were required to pay Income Tax at the rate of 3.0 percent and anti-dumping duty.

Thus an amount of Rs3.235 million has been short paid/evaded by the importers on account of withholding Income Tax and Antidumping Duty.

Accordingly, an Audit Observation was issued to M/s Lyallpur Chemicals and Fertilizers Limited, but the importer failed to clarify their position regarding short payment of Income Tax. In view of the aforesaid M/s Lyallpur Chemicals and Fertilizers Limited are held to have intentionally & willfully caused loss to the Government exchequer.

Contravention report is forwarded herewith for initiation of adjudication proceedings in the case.

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