KARACHI: Chaudry Mohammad Javed Collector of Customs Adjudication has ordered M/s Tata Textile Mills Limited to pay duty and taxes amounting to Rs 114.96 million as the company failed to meet the conditions of SRO 327(I)/2008. A penalty of Rs1.0 million is also imposed on the company.
M/s Tata Mills not only imported duty/tax free goods in excess of permissible face value of the license of Rs50 million but also failed to fulfill the condition of at least 80 percent export of its production during 2011-2012.
Moreover Tata Textile under license imported the machinery and spares and material required for the manufacture of yarn meant for export. The license expired on May 19, 2011 and later renewed up to May 19, 2012. The Mills applied another renewal of license up to May 19, 2013, and an audit by the department revealed that they had not only imported duty/taxes free goods in excess but also failed to fulfill the condition of at least 80 percent export of its production during 2011 and 2012, which is required as per SRO 327(i)/2008 for duty/tax concessions.
The Mills failed to achieve export target prescribed under SRO 327(1) 2008 during 2011, 2012, 2013 and 2014, therefore their license was suspended on February 13, 2015. And a show cause notice was also issued on February13, 2015 for cancellation of license.
In 2011, exports were 74.58 percent a shortfall of 5.42 percent, in 2012 exports were 77.04 percent thus a shortfall of 2.96 percent, in 2013, exports stood at 71.33 percent with a shortfall of 8.67 percent and in 2014, the exports were 69.51 percent thus showing a shortfall of 10.49 percent.
The indirect exports claimed by the M/s Tata Mills on account of local supplies against Standardized Purchase Order were not export under Sales Tax Act 1990 as well as EOU rules. So the benefits of the same is not admissible to Tata Mills.