KARACHI: The Directorate of Post Clearance Audit – Karachi has detected tax evasion to the tune of Rs 4,908,611 by M/s Nizam Energy on import of LED tube light rods, LED tube, input AC– 100 -277 (50/60 HZ). The PCA has also issued an audit observation under Section 26 and 32 of the Customs Act, 1969.
The PCA, while scrutinizing import data, found that M/s Nizam Energy (Private) Limited, Karachi, NTN # 4048293-6 imported declared to be “LED tube light rod, LED tube, Input AC – 100 -277 (50/60 HZ)” through Customs Appraisement (West), Custom House and claimed benefits of Fifth Schedule (Customs Duty) Part I-24, Sixth Schedule (Sales Tax)-15.2-25/06/20 and Income Tax @ 0% CL77 PT-IV 2nd Schedule ITO-10.
The exemptions are only available to SMD, LEDs with or without ballast with fittings and fixtures for promotion of the renewable energy technologies as per notification mentioned above. Whereas, clause 77 part-IV Second Schedule of Income Tax Ordinance, 2001 is more restrictive and allows exemption to items with dedicated use of renewable source of energy which includes sources like solar and wind power only. The examination staff in their examination report has not confirmed that the imported LED Lights are for solar or wind energy use. It appears from the examination report that the imported items are for general use as these are operative / works under alternating current (AC) of voltage ranges 100-277 volts which is the normal thermal / hydral power sources normally produced and used in Pakistan. The images scanned by the examination staff and examination report shows goods are operative at voltage as 100 – 277 volts. It is an undeniable proof that the imported goods are not meant for to work / operate with the renewable energy sources like Solar Energy or Wind Energy. The imported goods do not operate on direct current (DC) which is used / and operate in the renewable energy technologies. Therefore, the concessions under the claimed notifications are not available to the subject imports.
Therefore importer M/s Nizam Energy (PVT.) Limited, Karachi to pay the evaded amount of duties and taxes at the earliest.
