KARACHI: A Committee has been constituted comprising Director General I&I Abdul Rasheed Shaikh, Director General Customs Valuation Dr. Fareed Iqbal Qureshi, Chief Collector Appraisement Lahore Faiz Ahmed and Additional Collector Yasin Murtaza to re-investigate the under-invoiced imports of MG vehicles by Javed Afridi’s MG Motors.

Federal Board of Revenue (FBR) was instructed by the Public Accounts Committee to restart the investigation into the MG Motors vehicle import & under-invoicing scandal. The issue was first investigated in 2021, when the automaker allegedly under-invoiced the import value of its Completely Built-Up Units (CBUs) and was engaged in tax embezzlement.

These 1500cc cars attract 60% Customs Duty, 17% Sales Tax, 15% Regulatory Duty, 5.5% Income Tax, 5% FED and 3% Additional Sales tax.

During last year, around 10,000 vehicles have been imported by MG Motors. Reportedly, the vehicles were highly under invoiced while the declared value of a CBU vehicle was drastically less than even the CKD kits of the same vehicle. That interestingly means that a vehicle in finished form was cleared at Karachi Port against a value even less than its non-assembled components.

Last year MG was also accused of fraud by its customers. Amidst facing delivery delays, several customers came forth claiming that until they paid On-Money/ Premium, the company kept delaying the delivery. Following the allegations, the company came along and blamed the delays in delivery on the shortage of semiconductor chips. Earlier this year, Karachi’s consumer court also fined MG for delaying vehicle deliveries. MG is expected to begin full-scale assembly of its vehicles in Pakistan, so far the company has been dealing in CBUs only.

When, MG Motors imported another West 200 cars through MCC Appraisement West, then collector Nasir Jamil, Assistant Collector Salman Chaudry, Principal Appraiser Tawfiq Shaikh, AOs Ghani Soomro and Faraz Ahmed assessed the vehicles at $14,000. However, MG Motors refused the assessment. Post Clearance Audit (PCA) detected the case and sent contravention for Adjudication. And Adjudication ruled to assess the vehicles on $12000.

The committee will scrutinize country wide data of clearance of such vehicles both in CBU and CKD forms, get necessary verification of import value from concerned quarters including the manufacturer in China, and determine fair value in terms of Section 25 of Customs Act, 1969.

The committee will investigate and verify import documents submitted by the importer at the time of clearance from the concerned quarters.

The committee will also check the aspect of money laundering in the imports of MG Vehicles imported in both CKD and CBU forms in case mis-invoicing is established and to fix responsibility on the officers and officials involved in case any loss to revenue and impropriety in the process of decision making is established.

Counsel of MG Motors, said a couple of shipments were imported in 2019 at $14,500, which was a testing order. Later around 10,000 vehicles were ordered and the value of a vehicle on such a huge order was $11,000.

He said a committee comprising Collectors of MCC Appraisement West Tahir Qureshi, MCC Appraisement East Fayyaz Rasool and MCC Port Qasim Ashad Jawad did some verifications from China and proposed 5% increase in value over $11,000, which was rejected by Collector Appeals.

Sources said High Power Board (HPB) will likely convene sooner. Sources claim Chairman FBR restarted these investigations to malign senior officers and deprive them of their due promotions.