KARACHI: Collectorate of Customs Adjudication-I Collector Dr Farid Iqbal Qureshi heard Q-mobile tax evasion case. The MCC-Multan has alleged that the cellular company is involved in tax evasion of Rs 772 million in terms of taking undue advantage of SRO-460(I)/2013.
The departmental representative of Q-Mobile Afzal Ahmed Bhatti appeared before Dr Farid Iqbal Qureshi, while MCC-Multan Additional Collector Ghulam Mustafa and Multan Superintendent ASO Tanveer Malik pleaded the case on behalf of Pakistan Customs.
During the hearing, the departmental representatives of MCC-Multan had come up with the strong and valid legal points which knocked down the viewpoint of departmental representative of the cellular company.
In the hearing, the departmental representatives of MCC-Multan were of the view that the cellular company was paying sales tax @ Rs 250 against the import of each smart phone while the other cellular companies, including Samsung, Blackberry and Nokia had paid sales tax @ Rs 500 on import of such smart phones which were identical to the mobile phones imported by Q mobile.
Moreover, the departmental representatives of MCC-Multan stated that when the screen size of smart phone has been increased to 5 inches from 4.2 inches, the Q mobile stopped paying sales tax @ Rs 500.
The cellular company representatives had already admitted that they had followed the criteria of screen size while ignoring other characteristics laid down in SRO-460(I)/2013.
On the other hand, the departmental representative of Q-Mobile challenged the jurisdiction of MCC-Multan by saying that the mobile phones were cleared by the MCC-Preventive Karachi and Multan Customs could not seize the mobile phones.
To which the departmental representatives of the MCC-Multan gave the reference of Section 168 of the Customs Act 1969 which said that the appropriate officer of customs can seize any goods liable to confiscation under Customs Act 1969.
The mobile phones cleared by Preventive Collectorate attract Section 32 of the Customs Act 1969 and the authorities concerned of the MCC-Multan were liable to confiscate the goods under Customs Act 1969.
Subsequently, the departmental representative came up with the objection that the customs’ authorities have nothing to do with the collection of sales tax, as this issue should be handled by Inland Revenue Services (IRS)-FBR.
On which, the representatives of the Multan Customs informed the Collector-Adjudication that Section 6 of the Sales Tax Act 1990 allows customs authorities to collect sales tax at import stage, as customs duty and all provisions of Customs Act, 1969 have been applied for collection.
During the hearing, it was repeatedly stressed by the Multan Customs that the smart phones are mentioned only in Serial C of the SRO-460 chargeable to sales tax @ Rs 500, as the serial A and B are not applicable for smart phone.
It was also stressed that SRO 460(I)/2013 was issued under Section 13 of the Sales Tax Act, 1990 which deals with exemption of sales tax.
Therefore, if the importer failed to avail exemption of sales tax under Serial C of SRO 460(I)/2013 then only option available to him is to pay Sales Tax at standard rate of 16 per cent, stated by the department representatives of MCC-Multan.
Customs Adjudication-I Collector Dr Farid Iqbal Qureshi adjourned the hearing until Dec 11 after listening the viewpoints of both the parties.
The sources informed Customs Today that there was a possibility that the Customs Adjudication-I collector will decide the case in the next hearing.
