Shortcomings on part of MCC Port Qasim caused Rs3.8 billion loss to exchequer in 2015-16

KARACHI: The directorate of Internal Audit-Customs has found several discrepancies in the affairs of MCC Port Qasim during the period 2015-16, which resulted in revenue loss of Rs3.806 billion during the period.

The revenue leakage occurred due to non-realization of income tax and mandatory surcharge, non realization of duty and taxes on time barred customs securities, non-auction of seized goods, excess payment of commission to the auctioneers, short assessment of duty and taxes on imported goods, wrong classification of imported goods and sanction of refunds beyond jurisdiction etc.

Internal Audit has highlighted that MCC Port Qasim did not realized the leviable income tax of Rs1.53 billion from M/s Engro Elengy Terminal Pvt Ltd on the import of floating storage and re-gasification unit (FSRU). Moreover, Collectorate did not collect surcharge on late payment of duty and sales tax. MCC Port Qasim is required to effect recovery total of Rs1.839 billion.

Scrutiny of records revealed that goods declarations of M/s Pakistan Railway were cleared without confirming the deposit of leviable duty and taxes. Collectorate is required to provide proof of payment of Rs501.342 million.

Scrutiny of bank guarantee record and PRAL data for 2015-16 revealed that Customs securities obtained from various importers were found expired their mandatory period. MCC Port Qasim even after expiry of reasonable time has failed to initiated recovery action/encashment of the same and an amount of Rs467.316 million is stuck up.

Corporate guarantees deposited by M/s Halliburton Worldwide Ltd, M/s Sea Land Drilling Contractors, M/s Weatherford Petroleum Services, M/s BGP Pakistan International, M/s Sprinte Oil & Gas Services, M/s Weatherford Oil Tool Limited, M/s Exalo, M/s ENI Pakistan Limited, M/s Geofify Krakow S.A Pakistan, M/s Eastern Drilling Services, M/s Supreme Oil Services under SRO 678(I)/2004 were found expired.

However, no concrete efforts were made by MCC Port Qasim to recover government’s legitimate revenue.

Internal Audit highlights that MCC Port Qasim cleared several goods declarations (GDs) in respect of petroleum companies and their contractors without obtaining the requisite corporate guarantees to secure the element of sales tax to the tune of Rs61.324 million.

It is highlighted that an amount of Rs71.181 million is recoverable from M/s MOL Pakistan pertaining to the import of Oil well drilling equipment.

Scrutiny of record also found that an amount of Rs7.105 million was recoverable from M/s Pak Electron Limited and M/s Bonny International. Collectorate failed to make any efforts for the recovery of outstanding government revenue.

Directorate of Internal Audit has also highlighted over payment of performance allowance to the collectorate staff, irregular payment of utility bills, excess payment of commission to the auctioneer, non-deduction of advance income tax from auctioneer and over payment of refund resulting in loss to exchequer.

It may be mentioned here that former Director General Internal Audit Agha Jawwad had tasked Deputy Director Nafees Ahmed Khan, Superintendent S.A Jafri and Superintendent Shaikh Mansur to carry out the audit of MCC Port Qasim. The audit team quite efficiently and diligently conducted the audit and found several discrepancies.

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