DGI&I Customs unearths tax evasion fraud worth $358,740

Directorate General Intelligence and Investigation (DGI&I), Customs, Karachi has unearthed a big fiscal fraud of $ 358740. According to an FIR, special investigation unit (SIU) of the Directorate received information that some unscrupulous elements were allegedly involved in a big fraud for money laundering and for tax evasion under the garb of imports of steel sheets in KEPZ.

Reacting on this, SIU had initiated a formal inquiry against the companies concerned and detained all imported consignments lying in KEPZ unit of M/s Royal Impex (Pvt) Ltd.

During initial course of investigation, it was revealed that M/s Hassan Steels, Karachi imported the consignment of Steel Sheets in coils weighting 597.9MT from South Korea and foreign exchange amounting to US$ 358740 were paid on their behalf to the foreign suppliers from Pakistani resources against the said imports in Pakistan but not in KEPZ, which is considered as foreign territory and electronic I Form (EIF) was also uploaded in WeBOC by M/s Hassan Steels for the said imports. However, M/s Royal Impex through mutual conspiracy with the legal importer arranged manifestation of the cargo for KEPZ in their name by tampering of the relevant commercial invoice and packing lists, etc besides concealing existence of Letter of Credit (LC), the FIR said.

Furthermore, it said that as per EPZA rules, the said consignment for which foreign exchange was paid through Pakistani resources, was not qualified as EPZ cargo hence it could not be processed and released as EPZ cargo. Similarly, under Customs Act 1969, goods declaration could only be filed legal importer for the clearance into Karachi or Pakistan only.

However, M/s Royal Impex illegally filed import GD for transportation of the goods to KEPZ under the garb of EPZ cargo through their authorized clearing agents M/s Cosmos Trading Development on the basis of tampered and fabricated false import documents and also concealing existence of LC.

The FIR stated that they also tampered with unit value and total value of the goods in the commercial invoice and illegally filed GD despite not being lawful importers.

Scrutiny of records further revealed that evidently, the steel sheets were of secondary quality, attracting 20 percent customs duty (CD), 2 percent additional CD, 2 percent RD, 5 percent sales tax, 17 percent additional sales tax, 3 percent income tax and 6 percent ad val.