PCA Karachi detects mass under-invoicing, creates demand of Rs350 million

KARACHI: Directorate of Post Clearance Audit (PCA) Karachi has served contravention on a number of traders importing tyre and tube from India for evading government’s legitimate revenue to the tune of Rs350 million through under-invoicing.

Scrutiny of import data of several traders, conducted by Director PCA Gul Rehman, revealed that they had imported declared to be “tyres and tubes, with or without flaps of different brands” of Indian origin, under different sub heads of PCT heading 4011 through different collectorates.

In these cases, the assessment has been made as per Valuation Ruling applicable at the time of import. However, in pursuance of information that the group under invoicing is being carried out, the matter was investigated taking into consideration the official website (www.iceqate.qov.in) e-commerce portal central board of excise and customs.

Since the bill of ladings enclosed with the GDs in the online WeBOC system mentions the shipping bills numbers and dates filed with Indian Customs for export of impugned goods to Pakistan, therefore, the containers numbers and FOB value mentioned therein in Indian rupees after addition of freight element and conversion into US dollar were retrieved from the aforesaid Indian official website. The same were matched with the corresponding particulars mentioned in the Good Declarations filed in Pakistan which revealed that the container numbers are matched however export price of the goods declared to the Indian Customs is on much higher side.

It is relevant to add that transaction value is the value, which has been actually paid or payable in terms of section 25 of the Custom Act, 1969, required for computation of Custom Duty and other Taxes.

Therefore, the transaction value of the subject imports is the value declared to Indian Customs at the time of exports of subject consignments. In the subject case, FOB value in Indian rupees as is available on the above mentioned portal is added with freight element is calculated, which clearly reveals that under invoicing is being made and correct information regarding transactional value has been suppressed by filing Goods Declarations at lower values than the actual transactional value paid by the importers in Pakistan to the exporter in India.

These importers include M/s Standard Enterprises Pvt Led, M/s Pak Tyre Corporation, M/s Zafar Enterprises, M/s Waheed Brothers Pakistan Ltd, M/s Fazal Tyre Corporation, M/s Trinity Enterprises, M/s Shafiq Sons, M/s Tyre Sales Corporation, M/s KQ Enterprises, M/s Shafqat Automobiles, M/s Al-Fateh Enterprises, M/s Lords Impex and M/s Zahid Ali Company.

PCA Karachi served Audit Observations on all these importers, but they could not justify their actions.

Deputy Directors Rahid Munir and Sajid Baloch and Assistant Director Ghulam Mohammad have prepared contraventions on all the above-mentioned traders, which have been forwarded for Adjudication.

It is found that several importers did not shipping bill numbers of the Bills of Ladings due to which more detections could not be made so far.

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