KARACHI: A comprehensive scrutiny of import Goods Declarations (GDs) has revealed alarming discrepancies, including fiscal fraud, misuse of customs systems, and deliberate evasion of duties and taxes. The findings, based on post-clearance audits and random assessments, point to systemic vulnerabilities and sophisticated schemes orchestrated by importers and clearing agents.
Fiscal Fraud Through GD Cancellation and Refiling
Investigators uncovered a pattern of fiscal fraud involving the cancellation and refiling of assessed GDs. Importers initially filed GDs with mis-declared descriptions, Harmonized System (HS) codes, and undervalued goods. Upon detection of discrepancies during examination, they requested cancellation of the GDs rather than paying the assessed duties and taxes. These requests were granted, and the same importers refiled GDs with similar misdeclarations, which were then assessed at lower duty rates.
The audit revealed that four GDs were cancelled using the WeBOC IDs of AC/DC Auction and AC/DC Assessment Group, resulting in evasion of Rs. 35.6 million in duties and taxes and Rs. 24.7 million in statutory fines. The total revenue loss from these transactions amounted to Rs. 60.3 million.
Fraudulent Clearance of Solar Panel Containers
A separate investigation into the import of solar panels exposed a large-scale scam involving five fictitious importers. Fifty-four containers manifested in 2023 were fraudulently cleared between December 2024 and February 2025 through 28 GDs filed under unauthorized National Tax Numbers (NTNs) and Customs User IDs. The scheme exploited weaknesses in the IRS Registration Module and Customs Computerized System.
One of the bogus entities, M/s Smart Impex, was linked to Abdul Aziz, who was arrested in Quetta in October 2023. Aziz confessed to being a front man, paid Rs. 30,000 monthly to pose as the proprietor, while his cousin Amanullah masterminded the operation. Despite the cancellation of Smart Impex’s sales tax registration in February 2019, 27 containers were cleared under its name.
The remaining four entities—M/s Zafar International, M/s Pearl International, M/s Abid and Co., and M/s Mirza Collection—used alternate NTNs and Customs User IDs to conceal their identities. These entities were physically non-existent, and FIRs were lodged against them in December 2023. Their proprietors remain at large. The fraudulent filings under non-existent businesses constitute fiscal fraud under Section 32A of the Customs Act and are part of a broader trade-based money laundering scheme.
Violation of Faceless Assessment Protocols
A random audit of 200 GDs revealed that in 28 cases, clearing agents uploaded previously cleared GDs or letters containing their personal contact details. This practice undermines the faceless assessment system, which aims to eliminate human interaction and ensure impartiality in customs assessments.
In all such cases, faulty assessments led to evasion of Rs. 32 million in duties and taxes, along with a loss of Rs. 23 million in statutory fines due to the absence of contravention cases.
Use of Vague Descriptions to Facilitate Evasion
The audit also highlighted widespread use of vague or ambiguous descriptions in import GDs. In many instances, examining officers failed to specify relevant product specifications, allowing assessing officers to apply lower values or incorrect HS codes. This facilitated evasion of duties and taxes across multiple categories:
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Misdeclarations to avoid application of Valuation Rulings: 62 GDs, Rs. 182 million
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Misdeclarations to avoid correct classification: 292 GDs, Rs. 185.5 million
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Misdeclarations to claim inadmissible exemptions: 108 GDs, Rs. 428 million
The total revenue loss from these 462 GDs amounted to Rs. 795.5 million.
Further analysis of 28 GDs revealed misclassification, non-application of valuation rulings, and misdeclaration of descriptions, resulting in Rs. 54.68 million in combined duty/tax evasion and statutory fines.
Systemic Challenges and Accountability
The findings underscore a critical challenge in post-clearance audits, particularly when vague descriptions are accepted during initial assessments. Such practices obscure the true nature of goods, shifting the burden of proof onto the department and making violations difficult to detect.
The revelations raise serious concerns about the integrity of customs assessments and the effectiveness of existing safeguards. Authorities are expected to initiate further investigations and tighten protocols to prevent recurrence of such fraudulent activities.