ISLAMABAD: Customs authorities have detected huge tax evasion of Rs 1.12 billion by a Chinese firm that supplies coal to the 1,320-megawatt Sahiwal Power Plant, but the department has not yet lodged an FIR against the company due to its importance in CPEC projects.
Sources said the company deposited due taxes of Rs1.2 billion in the exchequer last month but the FBR is reluctant to register a criminal case against Huaneng Fuyun Shipping Company owing to ‘national interests’.
According to reports, Customs Port Qasim, Karachi, unearthed the case of evasion of duty and taxes by Huaneng Fuyun Ports & Shipping. The company belongs to state-owned China Huaneng Group. Another sister company of the Group, Huaneng Shandong Ruyi (Pakistan) Energy (Private) Limited, has built the 1,320MW Sahiwal power plant under the CPEC framework.
On Pakistan’s National Day, Prime Minister Shahid Khaqan Abbasi signed the “Outstanding Achievement Award” for the Huaneng Sahiwal Power Station, according to the China Huaneng Group’s website.
China Huaneng Group is a key state-owned company established with the approval of the State Council. It does business in development, investment, construction, operation and management of power sources; finance and energy transportation.
The company imports coal and supplies it to the Punjab-based power plant. The customs authorities took action after they came to know that the company utilised machinery imported during fiscal years 2016-2017 without filing of Goods Declarations (GDs) and payment of duty and taxes.
A team of customs officials comprising Chief Collector-Appraisement (South) Rasheed A Sheikh and Collector MCC, Port Qasim Muhammad Javaid carried out detailed scrutiny of the company’s imports.
The scrutiny revealed that the company imported 14 consignments since 2016. Out of these 14 consignments, four got cleared against payment of duty and taxes but 10 were utilised without fulfilling due process of law and payment of duty and taxes.
These consignments did not leave the port premises and were used for development of a dedicated coal terminal at Port Qasim for uninterrupted coal supply up to the country to Sahiwal power project.
The FBR has recovered duties and taxes on the imports of ‘Coal Belt Conveyor’ and ‘Railway Track Fittings’ to the tune of Rs237 million. The taxes and duties worth Rs885 million have also been recovered against eight consignments of different machinery and equipment, said the officials.
The company has admitted its default and agreed to pay the evaded amount of duties and taxes worth Rs1.12 billion, which the authorities believed was one of highest tax recovery in a single case at the import stage.
Although the FBR is reluctant to register an FIR against the firm, it has started other legal formalities for recovery of penalties on the evaded amount of duties. The collector has further directed to identify and nab culprits involved in the scam.
