KARACHI: The Post Clearance Audit (PCA) South has detected a tax fraud amounting to Rs. 2.4 billion against a prominent cement manufacturer, who is reportedly involved in misusing four export tax exemption regimes.
According to the documents, this is a unique kind of fraud as the accused enterprise reportedly misused four export tax exemption regimes; i.e., Manufacturing Bond, DTRE, Temporary Import (TI) under SRO 492, and Export Facilitation Scheme (EFS), simultaneously and provided severe financial shock of Rs2.4 billion to the national kitty.
The documents further revealed that the manufacturer had imported huge quantities of clinker and packing materials without fulfilling the export requirements set under these tax exemption schemes.
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Keeping this in view, the investigation was initiated by Sheeraz Ahmed, Director PCA South on the directives of Dr Zulfikar Ali Chaudhry, Director General of PCA.
During preliminary scrutiny based on available customs and sales tax data, several discrepancies came to the surface that prompted a physical inspection of the factory premises on December 18, 2024, which confirmed the veracity of the information.
A stock assessment made by the PCA audit team discovered that out of the total quantity of 463,334 MT, a mere 62,000 MT of clinker was found at the factory, while a huge quantity of 395,000 MT worth Rs 3.3 billion was found missing, indicating that the missing goods had been pilfered and potentially sold in the domestic market.
The importer couldn’t present any plausible explanation for the huge quantum of missing goods.
During stock-taking, the importer claimed that a quantity of 15,000 MT of clinker was stockpiled at Taftan and Gwadar dry ports but this assertion was found to be false as no tangible evidence corroborated this claim, suggesting another layer of deceit.
The importer made heavy imports by availing exemption of goods but failed to make corresponding exports under said schemes, despite the factor that utilisation periods had long expired in the case of manufacturing bond, DTRE, and SRO 492.
The total evasion of duty taxes worked out by the PCA, South amounts to a staggering Rs. 2.4 billion, out of which Rs. 369 million through Manufacturing Bond, Rs. 222 million via DTRE, Rs. 91 million under Temporary Import of SRO 492, and a colossal Rs. 1 Billion was evaded through EFS misuse.
A surcharge of Rs. 676 million was also found recoverable on account of illegal removal and sale of exempt goods. Acting promptly, the PCA, South has lodged a First Information Report (FIR), for fiscal fraud under Section 32A of the Customs Act, initiating an in-depth investigation to unearth all accomplices in this intricate scam that has been going on since 2020, PCA officials said.
There is information of massive misuse of the export facilitation regime by unscrupulous traders, causing huge financial losses to the national exchequer, PCA officials said.
Copyright Business Recorder, 2024
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