KARACHI: Collector Customs Adjudication Chaudry Muhammad Javed has imposed a penalty of Rs2.0 million on M/s Nishat Chunian Limited for availing the inadmissible benefit of concessionary SROs. The company has also been ordered to pay evaded duty/taxes totaling Rs23.584 million.
A penalty of Rs1.5 million has also been imposed on M/s Lucky cotton Mills (pvt) Ltd Karachi for availing the inadmissible benefit of concessionary SROs in a similar manner. The company has also been ordered to pay evaded duty/taxes totaling Rs9.442 million.
According to details, M/s Nishat Chunain Limited imported 13 consignments of raw cotton & ginned cotton while M/s Lucky cotton Mills imported 17 consignments of raw cotton & ginned cotton. Both the companies filed GDs availing the facility of sell-declaration available to them determining their duty and taxes on their own and paid the same.
The company was accused to have unlawfully claimed the benefit or SRO 1125/2011 on all consignments and paid Sales Tax Zero Percent under SRO 551(I)/2008 and Income Tax at 1.0 percent while the goods were subject to 5.0 percent income tax at import stage as the concurrent benefit of SRO 212(1)/2013 which is only available to goods that are covered under SRO 1125(1)/2011.
The Customs computerized System cleared their consignments through Green Channel without any human intervention.
M/s. Nishat Chuniant Limited and M/s Lucky cotton Mills were not entitled to the benefit of SRO 1125(I)/2011 in the light of the amending SRO154(I)/2013 which has excluded Raw and Gined cotton from the purview of SRO 1125 (I)/2011 through condition or the said SRO, which has stipulated that the benefit of the SRO will be available to the textile sector from spinning stage onwards. The imported goods were clearly of ginning stage, hence were excluded from the purview of SRO 1125(I)/2011.
After due process and deliberations, Collector Customs Adjudication Chaudry Muhammad Javed noted that after introduction of Customs Computerized System, the importer is responsible for assessing and paying his liability of duty/taxes. Thus the importers can’t complain that admissibility of claim of SRO is the sole responsibility of Customs authorities.
Collector Adjudication maintains that payment of sales tax and withholding tax in subsequent GDs by the importers is an ample proof that the importer deliberately made short payment of sales tax and withholding tax.
The Adjudication held charges established and ordered the importer companies to pay the evaded amount of taxes. Penalties were also imposed on both the companies.