KARACHI: The Collectorate of Customs Adjudication-I has issued a show cause notice to M/s Lyallpur Chemicals and Fertilizers Jaranwala Lahore for tax evasion of Rs 3.2 million by taking undue benefits under SRO 551(I)/2008 dated 11.06.2008.
According to details, during the scrutiny of the import data, the officials of the PCA revealed that M/s Lyallpur Chemicals and Fertilizers Limited, Lahore Road, Jaranwala, imported a consignment vide GD No. KAPR-HC-60588 dated 22.01.2011 under PCT heading 2510.1000 through MCC Appraisement (West) Custom House, Karachi said to contain “Natural Rock Phosphate 30% Un-Ground” and got the consignment cleared on payment of 1% income tax, by claiming SRO 551(I)/2008 dated 11.06.2008, for sales tax.
The claimed SRO for sales tax exemption issued under section 13 of sales tax Act 1990, therefore the same is not covered under zero rating regime of sales tax for the application of clause 9 of section 148 of the Income Tax Ordinance 2001 for payment of income tax at the rate of 1%.
The importers were required to pay income tax at the rate of 3% vide clause 9A part II to the section 148 of the Income Tax Ordinance 2001 and Antidumping Duty. Therefore, it violated the provisions of Section 32 (1) (2) & (3A) of the Customs Act, 1969 and Income Tax Ordinance 2001 punishable under clauses (1), (9) and 14 of Section 156(1) of the Customs Act, 1969 and punishable under relevant provisions of Income Tax Ordinance 2001.
Accordingly, an audit observation dated 14.04.2015 was issued to M/s Lyallpur Chemicals and Fertilizers Limited, Lahore Road, Jaranwala, Lahore, but the importer failed to clarify their position regarding short payment of Income Tax as required under the Income Tax Ordinance 2001.
