KARACHI: Customs Intelligence and Investigation – FBR has served notices on sever importers advising them to provide details of their imported yarn including Kota Yarn.

The import data retrieved from the Customs Computerized Clearance System namely WeBOC indicate that since July 01, 2021 till to date you, several importers imported tons of yarn after availing cumulative exemption of 7.5% of duties & taxes granted by the Government of Pakistan to the manufacturers.

Whereas the scrutiny of records retrieved from the offices of importers indicate that a substantial portion of this yam including Indian origin Kota Yarn was sold to different entities in same state on commercial basis.

I&I Karachi has directed the importers to provide information regarding origin of the yarn, quantity sold, name of entity yarn was sold to, address of buyer, NTN number and Goods Declaration against which yarn was imported.

M/s SKF Collection, M/s Raz Textiles, M/s Radium Silk Factory, M/s Brother Enterprise, M/s Mubeen International, M/s Alpha Textile, M/s Jannat Textiles have been served the notices. These importers cumulatively imported 142,874 tons of yarn worth Rs43.9 billion.

The FBR’s field formations earlier received alerts from the I&I Karachi about some industrial importers of yarn who are dodging duties and taxes and breaking the law by importing yarn from India.

The alerts state that industrial importers of yarn get a total benefit of 7.5% in duties and taxes compared to commercial importers. They get exemption of 3% AST under 12th Schedule of Sales Tax Act 1990, 2% ACD under SRO 967(1)/2022 and pay only 1% Income Tax as per SRO 1125(1)/2011 instead of 3.5% paid by the commercial importers.

But I&I Karachi discovered that some dishonest industrial importers, who get this 7.5% exemption on yarn import, are selling it commercially to other parties, causing a huge loss to the national treasury.

It is important to note that the country’s annual demand for imported yarn is over 0.8 million tons worth Rs.375 billion. This means that even a small amount of commercial sale by the industrial importers causes a huge loss to the national treasury.

As the investigation continues, the Director I&I Karachi Engineer Habib Ahmed has instructed the field formations to make sure that the yarn import allowed to industrial importers after 7.5% exemption in duties and taxes matches their production capacity.

The Director I&I Karachi has also pointed out that there is a ban on yarn import from India since 2019-20. He shared reliable information with Additional Directors Afzaal Wattoo and Inamullah Wazir that Indian yarn is still entering Pakistan through Dubai, Malaysia, Indonesia and Thailand.

The consignment of yarn coming from India has its labels, packing and container changed in these countries before being shipped to Pakistan.