Black tea imports: major tax evasion unearthed

KARACHI: The Customs Intelligence, Karachi has cracked down on a major tax evasion racket involving the import of black tea.

According to the details, importers were found misusing a tax exemption granted to businesses in Azad Kashmir, resulting in billions of rupees tax evasion.

Black tea imports into Pakistan are normally subjected to a six percent income tax. However, shipments destined for Azad Kashmir are exempted from this levy. Officials received credible intelligence that certain unscrupulous importers were exploiting this exemption to evade taxes on a massive scale.

The importers would bring in black tea consignments claiming they were meant for industrial units in Azad Kashmir to avoid the six percent income tax. But instead of sending the tea to its stated destination, they were diverting it for sale in markets across Pakistan without paying any duties.

Acting swiftly on this tip-off, authorities placed a 14-ton shipment of black tea under surveillance after it was imported by a company based in Mirpur, Azad Kashmir. Despite clearing customs at Port Qasim, the container was tracked to a warehouse in Karachi’s Maripur area rather than heading toward Azad Kashmir.

This led intelligence officials to raid the premises on Hawksbay Road, where they recovered the 14 tons along with an additional 530 tons of untaxed black tea. The tea had been imported by five different companies - all misusing the Azad Kashmir tax exemption.

Seized records shockingly revealed that these firms had already sold off another 3,000 tons of black tea in Karachi using the same devious modus operandi. The total value of the detained goods and tea already sold is a staggering Rs 1.6 billion.

The Customs Intelligence has initiated a probe into the money laundering and tax evasion racket under the Customs Act 1969 and Anti-Money Laundering Act 2010. Further investigation is in progress.

Copyright Business Recorder, 2024