KARACHI: Around 77000 kilograms of Cellulose Acetate Tow have reportedly been cleared under the guise of Polyester Staple Fiber (PSF), evading FED amounting to Rs. 3.38 billion.
The Cellulose Acetate Tow, a primary raw material for cigarette filters, is a high-duty item subject to Federal Excise Duty of Rs 44,000 per kg.
The case surfaced following an FIR lodged by the Customs Collectorate Gilgit-Baltistan after authorities seized a suspicious consignment during a routine examination.
Major tax evasion of Rs825m by trading firm detected
According to the official documents, the goods declaration of the consignment initially listed items including Walnut in Shell, Stipple Fiber, and School Bags. However, the physical examination revealed dramatically different contents.
Customs officials discovered 37,800 kilograms of undeclared Cellulose Acetate Tow, along with undergarments, school bags, and children’s bags made of artificial leather— none of which matched the original declaration.
To verify the nature of the seized material, customs authorities collected samples of the goods declared as Polyester Staple Fiber and sent them to the Customs House Laboratory in Faisalabad for testing. The laboratory report conclusively identified the material as Cellulose Acetate Tow, confirming the mis-declaration.
The significance of this finding lies in the vast difference in tax treatment between the two materials. Cellulose Acetate Tow, primarily used in cigarette filter production, attracts a Federal Excise Duty of Rs. 44,000 per kilogram, making it a high-duty item and an attractive target for smugglers seeking to avoid substantial tax payments.
Investigators have discovered that the same importer had previously cleared seven other consignments containing miscellaneous goods, with portions declared as Polyester Staple Fiber totalling 77,000 kilograms. Authorities are now conducting a comprehensive probe into these earlier shipments to determine whether they, too, were involved in similar mis-declarations.
Sources said that if the pattern of smuggling is confirmed across all consignments, the total duty evasion could amount to Rs3.38 billion in FED alone.
Copyright Business Recorder, 2025
Comments
Comments are closed for this article.