Misclassification of imported mobile parts; Revenue evasion reference prepared against M/s Three Biz Telecom

KARACHI: Customs Intelligence and Investigation has referred a case to Federal Board of Revenue (FBR) seeking approval to proceed with the legal action against M/s Three Biz Telecom, which has been found involved in evading government’s legitimate revenue of over Rs46 million on the import of mobile phone parts and components.

PCT heading 8517.1211 (SKD) was specifically created by the Government for local assemblers to classify mobile phones imported in CKD/SKD condition. However, M/s Three Biz Telecom imported huge quantity of components/parts of mobile phones by classifying the same under PCT heading 8517.7000 (parts) instead of classifying the same under the correct PCT created for the purpose (i.e. 8517.1211 – SKD).

On the instructions of Director Irfan Javed, Additional Collector Sheeraz Ahmed approached Pakistan Telecommunication Authority (PTA) seeking details of mobile phones assembled by M/s Three Biz Telecom after import of corresponding mobile phone parts in semi-knockdown (SKD) condition.

The details provided by PTA confirmed huge quantum of cell phones (1,50,650 units) imported and sold by M/s Three Biz Telecom in Pakistan after assembly of imported components, whereas FBR data depicted the company did not make any imports under the relevant PCT heading 8517.1211 (SKD).

On the basis of PTA data, the estimated revenue implication owing to misclassification to evade leviable duty taxes under the said PCT is worked out at Rs46.36 million during 16 months (May 2018 to July 2019).

M/s Three Biz Telecom was approached by Customs Intelligence and Investigation Karachi to justify their position and provide relevant documents confirming legality of imports and payment of revenue, but the company did not respond to Customs authorities.

On the directives of Director Irfan Javed, Additional Director Sheeraz Ahmed forwarded the reference to Director General Muhammad Zahid Khohar, whom forwarded the same to FBR seeking approval for further action.

An official said the company was involved in revenue evasion, which is a crime and nothing could justify a wrong deed whether it be philanthropy, employment generation or anything else. “A crime is a crime,” he said.

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