KARACHI: The Customs Collectorate of Adjudication-II has served a show-cause notice on M/s Salwa Feed Mills (Pvt) Limited for tax evasion of Rs 4.56 million on import of silos.
According to details, the PCA Karachi detected that the importer M/s Salwa Feed Mills Pvt Ltd had imported silos from the United States and availed concession of 8th Schedule (Sales Tax) and paid reduced rates of sales tax at 5 percent on the import of “Grain Storage Silos with all standard accessories” under PCT Heading 9406.0030.
The 8th Schedule (sales tax) extends benefits of reduced rate of sales tax to “machinery and equipment” for development of grain handling and storage facilities only. Whereas the silos are for storage purposes and do not qualifies the definition of machinery and equipment, sources added.
Therefore, the sources said that the benefits of reduced rate of sales tax was not admissible in this case and was chargeable to sales tax at 17 percent.
After detection of the contravention, the Directorate of PCA has forwarded the report to the respective collectorates and the Customs Adjudication for initiating adjudication proceedings and recovery thereof, the sources further informed.
And now, the Customs Adjudication-II has issued a show cause notice calling the management of the company to justify their position and pay the short-paid amount.