KARACHI: The Directorate General, Post Clearance Audit PCA, Directorate has detected tax evasion of Rs 668,654 by M/s Dewan Mushtaq Trade Limited by availing undue benefits of SRO 659(I)/2007 on import of coated calcium carbonate. An audit observation has been issued to the importer.
According to details, during the scrutiny of import data of coated calcium carbonate (PCT heading 3824.9094 and 3824.9099), it has been observed that certain grades of coated/treated calcium carbonate falling under PCT heading 3824.9099 chargeable to CD @ 10% have been cleared by the importers by mis-declaring them under PCT heading 3824.9094 chargeable to CD @ 5% to evade duty/taxes.
It is pertinent to mention that coated or treated calcium carbonate cleared under PCT heading 3824.9094 and 3824.9099 is being imported mainly in two forms:). In the form of fine white powder with its surface coated or treated with fatty substances (or wax). In this form, a thin coating is made on particles of calcium carbonate by wax or other fatty substance due to which its substantive characteristics/ composition and use is not changed ii)
In this form, according to the available literature as well as lab reports, the composition and characteristics of the substance are changed resulting into changing of its use as well.
This fact has also been endorsed by Customs Chemical Testing Lab as well as assessment groups in a number of cases where it has been recommended that coated/treated calcium carbonate in granular form with 20% coating of plastic medium may be classified under PCT heading 3824.9099 instead of 3824.9094. However, it has been observed that certain importers, willfully and knowingly, instead of mentioning exact PCT heading of such grades have got these cleared under heading 3824.9094 using green channel system, in order to evade duty/taxes.
Therefore, M/s Dewan Mushtaq Trade Ltd is advised to pay the evaded duties/taxes at the earliest.
