KARACHI: The Directorate of Internal Audit – Customs has made an observation that MCC Gwadar short-realized an amount of Rs53.102 million from ship breakers during 2014-15.
The Audit Team comprising Director Sabir Jamal, Superintendent S.A Jafri and Deputy Superintendent Shaikh Mansur scrutinized the goods declarations in respect of ship breaking for the period under review.
It was observed that assessment of income tax was made without including the incidence of sales tax leviable thereon in the value for the assessment of income tax.
Due to non-implementation of relevant provisions of Income Tax Ordinance 1969 by MCC Gwadar, national exchequer sustained a loss of Rs53.012 million. MCC Gwadar is required to realize the short assessed income tax along with default surcharge.
Scrutiny of ship breaking files it was observed that Custom examination of POL products was normally carried out either on the basis of declared quantity or eye estimated as at the time of examination no qualified Quantity Surveyor or other means required for this purpose was adopted to ascertain the exact quantity of POL products available on the various tanks of the ship.
Therefore in the interest of government revenue it would be appropriate if post clearance reconciliation is carried out on the basis of examination report and from the Gate passes issued by the importer or any other record so that exact quantity of POL product may be ascertained and differential amount of government revenue may be recovered if any.
It was observed that M/s Thal Limited was granted DTRE, in which case utilization period expired on January 30, 2015. M/s Thal Limited failed to file reconciliation statement by due date. However, no action was initiated by the collectorate even after expiry of one year and six months. MCC Gwadar is required to justify this omission and probe whether imported input goods have been consumed or otherwise.
Scrutiny of import data in respect of Custom House Mand reveled that 03 percent value additional tax was charged on import value instead of duty paid value in several goods declarations of petroleum bitumen. Due to adoption of wrong method of assessment of VAT exchequer sustained a loss of Rs0.97 million.