Saturday , January 23 2021
Breaking News
Home / Breaking News / Rs 240 million fraud: Adjudication serves show-cause on 12 fabric importers
Rs 240 million fraud: Adjudication serves show-cause on 12 fabric importers

Rs 240 million fraud: Adjudication serves show-cause on 12 fabric importers

 

KARACHI: The Customs Collectorate Adjudication-I served show-cause notices on 12 fabric importers allegedly involved in financial fraud in term of tax evasion amounting to Rs 240 million by taking undue advantage of SRO1125(I)/2011 on commercial import of fabric.

The importers who have been served with show-cause notices include Al-Mawadah Textile, AI Enterprises, Ahsan Enterprises, Al-Harmain Textile, GM Exports, Hira Exports, Pioneer Textile, Anwar and sons, Nawaz Enterprises, Sara Corporation, BA Impex and WJK Enterprises.
According to details, Al-Mawadah has been accused of tax evasion to the tune of more than Rs 18 million in term of additional sales tax and advance income tax; AI Enterprises was involved in tax evasion of Rs 18 million; Ahsan Enterprises was involved in tax evasion of Rs 45 million; Al-Harmain was involved in tax evasion of Rs 7 million; GM Exports evaded tax amounting to Rs 59 million; Hira Exports was involved in tax evasion of Rs 102 million; Pioneer Textile was involved in tax evasion of Rs 18 million; Anwar and sons evaded tax to the tune of more than R s6 million; Nawaz Enterprises was involved in tax evasion of Rs 33 million; Sara Corporation was involved in tax evasion of about Rs 8 million; BA Impex evaded tax to the tune of Rs 19 and WJK was involved in tax evasion of Rs 5 million.
It is to be noted that all these case fall in the purview of MCC-Appraisement (West).
According to the MCC-Appraisement (West), certain unscrupulous commercial importers attempted to mis-use the concessionary rate of sales tax provided under SRO1125 (I)/2011 by obtaining sales tax registration from Inland-Revenue under the category of manufacturers despite having no manufacturing facility of their own.
It is to be noted that according to condition (VII) of SRO1125(I)/2011, amended vide SRO154(I)/2013, SRO504(I)/2013 and SRO898(I)/2013, sales tax is chargeable on import of fabric at concessionary rate if imported by registered manufacturers and commercial importers of different slab. As per above mentioned condition of said notifications, registered manufacturers listed in the Active Taxpayers’ List (ATL) pay sales tax at import stage @3per cent on fabric imported for in-house consumption and income tax @1per cent while commercial importers were required to pay additional sales tax @2per cent over and above the concessionary rate of 3per cent and income tax @3per cent.
Furthermore, scrutiny of the relevant import data revealed that the importers imported consignments containing different kind of fabrics, and filed GDs for home consumption, falsely claiming benefit of Sales Tax vide SRO1125(I)/2011 by declaring the imported goods for in-house consumption in the capacity of manufacturer.
The importers determined their liability of payment of duty/taxes by claiming undue benefit of SRO1125 (me) /2011 and sought clearance under Section 79(I) of the Customs Act, 1969.
Therefore, the aforementioned importers committed an offence of mis-declaration in term of Section 32(1)(2), 32-A, 79(1)(b) and 80 of the Customs Act, 1969, Section 6,11 & 36 read with the Section 7A of the Sales Tax Act, 1990 and Chapter X of the Sales Tax Procedure Rules, 2007 vide SRO480(I)/2007 read with SRO1125(I)/2011,amended vide SRO154(I)/2013, SRO504(I)/2013, SRO898(I)/2013 and SRO 154(I)/2013 further read with Section 148 and 161(2) of the Income Tax ordinance, 2001 punishable under clauses (14) & 14(A) of the Section 156(I) of the Customs Act, 1969 read with the Section 33, 34 & 36 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001.
The Customs Collectorate Adjudication-I will take up the cases for hearings from Sept 16.
It is to be recalled that Customs Today had brought the issue of commercial importers mis-using using SRO1125 (I)/2011 to the fore.