MULTAN: Collectorate of Customs Appraisement Faisalabad has detected tax evasion of Rs48.880 million against M/s Maqbool Textile Mills Limited for misuse of imported raw cotton and machinery during audit.
M/s Maqbool Textile Mills Limited was granted (Export Oriented Unit) EOU license under SRO.327 (I)/2008 on 29/3/2008 valid till 8/10/2017 for duty and tax free import of machinery, parts and raw material for spinning unit . According to mandatory provisions of rule 10(3) of the Export Oriented Units and Small medium Enterprises Rules 2008, the licensee is legally bound to mention the SRO 327(I)/2008.
Multan Customs has given DTRE approval to M/s Maqbool Textile Mills for the export of 3496986 kilograms cotton yarn by availing the benefit of exemption from cotton duties and taxes under scheme of SRO 327(I)/2008.
It is also pertinent to mention here, that M/s Maqbool Textile Mills Limited has also purchased local raw cotton 3760040 kilograms from months of January 2016 to May 2016 by declaring a quantity of 1264986 kilograms as opening balance for the period. But at the time of getting its records audited the licensee shown record of 5025000 Kilograms local raw cotton, unconsumed ,has claimed the production of the entire quantity of yarn exported during these months. Said importer has not provided any supporting relevant documents for the export shipping bills and others to audit. It has been revealed during scrutiny of record submitted by M/s Maqbool Textile Mills Limited consumed the entire quantity of 3496986 Kilograms claiming the percentage of wastage @ 15 on its record (without having approval from the IOCO allowing the percentage of 6% and showing difference of the 181811 Kilograms produced yarn lying at its closing balance.
M/s Maqbool Textile Mills Limited has misused the imported raw cotton by availing exemption from duties and taxes involved in the import of raw cotton. As per rule -2(d)(i) of SRO 327(I)/2008 licenses was required to achieve export at least 80 % of its production. In the light of audit record, licensee was failed to achieve the mandatory target of export of its output goods .Due to grave failure in the achievement of mandatory export target, the objective of granting export oriented unit license to the licensee has lost its worth. Besides this importer has also imported various machinery under SRO 327(I)/2008 valuing Rs.36.665 million to be used in the in the machinery installed in the EOU.
During the scrutiny of DTRE record by Audit team, DTRE user did not achieve target of 80 % production from imported cotton Yarn free of duty and taxes under the scheme of SRO 327(I)/2008. Customs teams found that M/s Maqbool Textile Mills limited have failed to export the cotton yarn and misuse the facility of imported raw cotton and machinery and its parts. Therefore Customs has framed contravention report against importer for the recovery of Rs.48.880 along with default surcharge and other penalties in the light of audit report. Contravention report has been forwarded to Customs Adjudication Multan for the further proceedings.
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