Leading pharmaceutical company: DGI&I detects Rs 43.6 million tax evasion

Directorate General of Intelligence and Investigation (DGI&I)-FBR, Karachi has caught one of the leading pharmaceutical companies for Rs 43.6 million tax evasion; it was learnt here on Wednesday. According to sources, the DGI&I-FBR, Karachi had received credible information that several pharmaceutical companies were reportedly involved in importing huge quantity of aluminium bottle caps which are fixed to seal the neck of bottles by misusing SRO 567 (I) 2006.
They said that pharmaceutical companies were allowed to clear the consignment of closing lids under concessionary custom duty of just 5 per cent. However, these companies are involved in importing aluminium caps in the garb of closing lids to evade 20 per cent custom duty. Sources said that the said SRO did not allow the benefit of 20 per cent custom duty on the import aluminium caps and the pharmaceuticals companies were required to pay statutory rate of duty @ 25 per cent custom duty.
Moreover, sources said that DGI&I on a tip-off retrieved import data of this leading pharmaceutical company and after scrutinising its record, it had been confirmed that this pharmaceutical company had made Rs 43.6 million tax evasion by misusing SRO 567(I) 2006 for the import of aluminium caps consignments. The consignments imported and cleared through MCC, Appraisement (East/West), Karachi as per Goods Declarations, sources informed.
They said that the Directorate had served notice to the said pharmaceutical company under section 26 of the Customs Act, 1969 for further verification, asking to provide all relevant documents including contract, LC and samples of goods/images of goods/manufacturers' catalogue of under-reference goods, etc. However, only copies of GDs and some other documents were produced whereas samples of goods/images of goods/manufacturers' catalogue of under-reference goods were not provided by the company.
Sources further said that commercial invoices of relevant exporters provided to the Directorate clearly showed the description of goods ie "aluminium caps whereas good description mentioned on GDs was closing lids aluminium high density polyethylene/polypropylene.
They said that this pharmaceutical company, which cleared its aluminium caps consignment in March 2014 at standard rate of customs duty (25 per cent), was deliberately involved in mis-declaration and tax evasion for sometime. They said that Directorate had determined the evaded amount to Rs 43.6 million under custom duty Rs 33.6 million, sales tax Rs 6.67 million and income tax Rs 3.24 million which is recoverable from the importer.