KARACHI: Directorate of Customs Intelligence and Investigation (I&I) detected tax evasion of Rs4.15 billion by Export Processing Zone (EPZ) units.
Sources said that after directions of Director Customs Intelligence and Investigation Khaleel Yousafani, Additional Director Rana Tasleem and Deputy Director Tauseef Gorchani conducted an exercise, which unearthed a massive evasion of Rs4.15 billion by certain KEPZ units.
“The investigation conducted so far shows that several units located in the KEPZ, import duty-free items for processing at the zone for subsequent export, but instead of exporting, they consume these items in the local market,” the documents revealed. This activity by the units has caused huge revenue losses to the exchequer in terms of leviable duty and taxes.
The directorate retrieved the record of the past five years (July 2016 to March 2021) of KEPZ units regarding fabric, steel, aluminum, and used clothing from PRAL (Pakistan Revenue Automation Limited) and reconciliation of the exports vis-à-vis imports pertaining to both from abroad and tariff area conducted.
The official documents showed that “about 20 units were identified, which have zero exports vis-à-vis their imports. The quantity of the goods imported is 8,059 metric tonnes attracting duty and taxes, amounting to Rs529 million. The Customs data shows nil exports by these units,”.
A few of these units were also found non-existence at the KEPZ during subsequent physical visits by the Customs officials. Further investigation revealed that around 34 units were identified, which have imported raw material for one sector and no export pertaining to that particular sector is affected.
“However, some exports pertaining to the different sectors are shown in the Customs data.” This resulted in evasion of duty and taxes of Rs2 billion and the unaccounted quantity of import was 13,405 metric tonnes.
The directorate conducted an investigation of 14 more units of KEPZ. The units imported a huge quantity of items to be exported, but only minimal or negligible quantity exported, which leads to huge evasion of duty and taxes. “The total import quantity amounted to Rs5.99 billion while only Rs4.37 billion worth of exports were made.” Therefore, an amount of Rs1.62 billion was evaded.
Besides, the directorate said several other units had been identified where miscellaneous discrepancies such as quantity, exports against the import, valuation, etc, were detected. The directorate hoped that further investigation into these identified discrepancies would lead to the evasion of billions of rupees.
The directorate said notices had been issued to the KEPZ units to clarify their position with respect to the evasion. “Majority of the units have not replied.” The directorate said it had initiated a legal process against the units involved in the mega fraud.
