Exporters paid billions illegally?

ISLAMABAD: The Auditor General of Pakistan (AGP) has claimed that Ministry of Commerce (MoC) and a national independent authority paid billions of rupees to exporters illegally, recommending proper investigation on “excess” payment to exporters.

Para-5 (b) of the Controller General of Accounts (Appointment, Functions and Powers) Ordinance, 2001 deals with functions of the Controller General of Accounts and states that the functions of CGA shall be to authorize payments and withdrawals from the Consolidated Fund and Public Accounts of the Federal and Provincial Governments against approved budgetary provisions after pre-audit checks as the Auditor-General may, from time to time, prescribe.

The AGP, in its audit report 2020-21, states that Finance Division (C. F. Wing) in its Office Memorandum of February 22, 2019 issued Accounting procedures for the subsidy/incentive schemes (DLTL, DDT, sugar, wheat exports, etc.)

The management of Ministry of Commerce, Islamabad issued release orders amounting to Rs 4,004.574 million for drawback duty claims of exporters for onward payment to exporters during 2019-2020.

Audit maintains that the utilisation of record provided by the management reflected a payment of Rs 4,513.342 million to 1,704 claims of exporters against a released amount of Rs 4,004.574 million, therefore an excess amount of Rs 508.574 million was paid to exporters.

Audit has observed that payment was made without verification, pre-audit and veracity of claims by the controlling Ministry. Moreover, against payment of Rs 4,513.342 million, two certificates of utilization amounting to Rs 29.865million and Rs 336.511 million were submitted.

Audit maintained that the payment of subsidy/incentive schemes without accounting procedures approved by CGA, authorization of payments withdrawal of amounts pre-audit is illegal.

The Audit further stated that non-compliance of ECC directives to review sugar stock, export and prices resulted in price hike of sugar.

Elaborating this point, Audit stated that the ECC of the Cabinet, on October 2, 2018 and December 4, 20218 considered the summary submitted by the Commerce Division regarding export of sugar (crop year 2017-18) and allowed 1.10 million metric ton of sugar subject to the following conditions: (i) Inter-Ministerial Committee (IMC) will meet fortnightly to review sugar stock, export and price situation; and (ii) in case of increase in the domestic price of sugar, the Committee would recommend to the ECC of the Cabinet for discontinuation of further exports. Audit observed that the IMC did not meet fortnightly as directed by the ECC to review the sugar stock, export and price situation.

Audit stated that had meetings of IMC been held regularly then the export of sugar would have been discontinued on April 1, 2019 (in its 7th or 8th meetings).

However, 495,742,000 kgs of sugar was exported from April, 2019 to Jan, 2020 and resultantly sugar prices increased from Rs 55 to Rs 80, overburdening the general public.

Audit has recommended an inquiry be conducted to fix responsibility as neither the management replied nor was DAC convened.

Copyright Business Recorder, 2021