Steel coils import: Customs Intelligence launches crackdown against misuse of concessionary regime

KARACHI: Customs Intelligence Karachi launched a crackdown against misuse of concessionary regime on the import of steel coils and lodged three FIRs for submitting bogus import documents to hoodwink Customs authorities.

Information was received through Director Customs Intelligence Karachi Irfan Javed that certain unscrupulous importers and traders are mis-using concessionary regime. Furthermore, it was informed that after availing the concessionary benefit the impugned goods (steel coils) were being illegitimately sold in the open market, thereby not only mis-using the concessionary regimes and incurring revenue loss to the national exchequer but also hurting the legitimate traders who import subject goods at statutory rates and pay full duty and taxes.

Resultantly, on the directives of Additional Director Sheraz Ahmed and Deputy Director Muhammad Adnan, raids were conducted by the staff of ASO I&I Customs and a number of steel coils present at M/s Arain Brothers Goods Transport Co, M/s Kissan Goods Transport Co and M/s M.A. Chaudhary Goods Transport Co at Hawksbay Road were detained.

It is pertinent to mention that the standard rate of Customs Duty on Electro Galvanized Steel Sheets of Secondary and Prime quality is chargeable at 20 percent, and 11 percent respectively, whereas under concessionary regime Customs duty 1.0 percent is chargeable on secondary and prime quality.

However, as per SRO-655(1)/2006, the Engineering Development Board (EDB) determines the input output ratios of items to be manufactured and total annual requirement of raw material. Furthermore, the relevant import documents by the manufacturer-cum-importer are furnished to the EBD within forty-five days of the ending year as per Form-C against which the quota is allotted to the importer.

Overall, the Directorate General detained total number of 560 Coils at three different Goods transport Companies. Out of these 560 coils, 291 coils have been delivered to their legitimate Importers/Claimants after verifications. Three FIRs have been lodged against M/s. A-One Steel and M/s. New Aijaz Engineering relating to a total of impugned 192 coils. The anticipated revenue loss in these cases is valued at Rs88.275 million.

During the course of investigation, few importers/claimant of the goods approached the Directorate for release of detained goods. The importers were directed to submit all the import documents including GDs, invoices, packing lists, BLs, Mill Test Certificates. LCs, etc relevant to detained goods.

In case of M/s. Arain Brothers Goods Transport Co, 163 coils were detained out of which 137 coils have been released alter verification, whereas 26 coils are pending verification of documents. In case of M/s. Kissan Goods Transport Co. 175 coils were detained out of which 63 coils have been released after verification.

However an FIR has been lodged against M/s. A-One Steel for submitting bogus documents of 96 galvanized steel coils of secondary quality. Verification of 16 coils is in process. In case of M/s. M.A. Chaudhary Goods Transport Co. 222 coils were detained out of which 91 coils have been delivered after verification.

Two FIRS have been lodged against M/s. A-One Steel and other against M/s. New Aijaz Engineering for submitting bogus documents of galvanized steel coils secondary quality.

Verification of documents in case of 35 coils is in process. Further investigations are underway and may include other unscrupulous elements, thereby expanding the scope of evasion of duty / taxes.

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