KARACHI: The Directorate of Post Clearance Audit PCA Karachi has detected tax evasion of Rs 607,540/- by M/s Olympia Traders on import of Blind Rivets in assorted sizes by availing inadmissible benefits under SRO 1125(I)/2011 dated 31.12.2011. The audit observation has been issued under Section 26 and 32 of the Customs Act, 1969.
As per details, the PCA Karachi during scrutiny and audit of import data found that M/s Olympia Traders, Mansehra, imported “Blind Rivets in assorted sizes” and declared PCT heading 8308.2000 vide Good Declaration No. KCSI-HC-3998 dated 10.07.2012 through MCC Appraisement (East), Custom House, Karachi and got their consignment released with the inadmissible benefit of sales tax, additional sales tax and consequent income tax under SRO 1125(I)/2011 dated 31.12.2011.
The Blind Rivets are correctly classifiable under heading 7616.1000, which is not included in the claimed SRO mentioned above. Further Taxpayer Online Verification shows importers are registered as “importers / exporter / distributor / wholesaler” in non-specialized stores with food.
It is evident from the history of the importer that a case of the same nature of claim of inadmissible SRO 1125(I)/2011 date 31.12.2011 was adjudicated vide Order-in-Original No. ONO – 103012 – 28062013 and the benefit of the SRO 1125(I)/2011 dated 31.12.2011 was denied on the GD No. KCSI-HC-166256 dated 07.05.2013 and the importers cleared their goods on payment of standard rate of sales tax, additional sales tax and income tax as per adjudication order under PCT heading 7616.1000.
Therefore importer M/s Olympia Traders, Mansehra, were required to pay sales tax, additional sales tax and income tax on the above mentioned GD (KCSI-HC-3998 dated 10.07.2012). This has resulted in short levy of Rs 495,951/- in sales tax, Rs 82,659/- in additional sales tax and Rs 28,931/- in income tax. Total short levy of Rs 607,540/-. The importers are directed to deposit the short levied amount in the national exchequer within 10 days with intimation to this office.
In case, M/s Olympia Traders, Mansehra, are of the opinion that the above finding is incorrect or that the short paid amount has been erroneously calculated or it has already been deposited, it is requested to provide a self-explanatory written reply with viable documentary evidences and complete set of import documents within 10 days from the issuance of this Audit Observation.
