In a significant move to protect the national treasury, Karachi’s Customs Intelligence has initiated a comprehensive crackdown on the misuse of tax exemptions granted for black tea imports intended for Azad Kashmir.

Under the current tax regulations, black tea imports are subject to a 6% income tax at the import stage. However, this tax is waived for imports destined for Azad Kashmir, a provision aimed at supporting the region’s industrial units. Recent credible intelligence, however, has exposed a scheme where unscrupulous importers have been exploiting this exemption. These importers have been falsely declaring their black tea imports for Azad Kashmir’s industrial units, only to divert the goods into Pakistan’s local markets, thereby evading the 6% income tax and inflicting substantial losses on the National Exchequer.

Acting on directives from the Director General of Customs Intelligence, Mr. Faiz Ahmed, vigilant surveillance was established on a shipment of 14 tons of black tea imported by M/s KF Foods, Mirpur, Azad Kashmir. The shipment, which was cleared through Port Qasim Collectorate, was tracked not to Azad Kashmir but to a warehouse on Hawksbay Road, Maripur, Karachi. The container was promptly detained, and a subsequent search of the premises uncovered an additional 530 tons of black tea, previously imported for Azad Kashmir by various industrial entities, including M/s KF Food Complex, M/s MIK Industries, M/s ZRM Industries, M/s Salam Industries, and M/s Inqelab Industries.

Further investigation into the warehouse records revealed that beyond the 544 tons detained during the operation, an alarming 3000 tons of black tea had already been sold in Karachi. This egregious misuse of the tax exemption has resulted in a calculated loss of goods valued at approximately Rs 1.6 billion.

The Directorate of Customs Intelligence, Karachi, is now conducting thorough investigations under the relevant sections of the Customs Act 1969 and the Anti Money Laundering Act 2010, to bring the perpetrators to justice and safeguard the economic interests of the nation.