KARACHI: The Post Clearance Audit – Karachi Directorate has detected tax evasion of at least Rs 1.4 million by M/s ZAH Enterprises Lahore on import of assorted LED fiber optic lights by availing undue benefits of Fifth and Sixth Schedule. In this regard, the PCA has also issued an audit observation under Section 26 and 32 of the Customs Act, 1969.
The PCA, while scrutinizing import data, found that importer M/s ZAH Enterprises Lahore imported “Assorted LED fiber optic lights for solar use with panel and fittings” through Customs Appraisement West, and claimed the benefits of Fifth Schedule and Sixth Schedule.
The exemptions are only available to SMD, LEDs with or without ballast with fittings and fixtures for promotion of the renewable energy technologies as per notification mentioned above. Whereas, clause 77 part-IV Second Schedule of Income Tax Ordinance, 2001 is more restrictive and allows exemption to items with dedicated use of renewable source of energy which includes sources like solar and wind power only.
The examination staff in their examination report has not confirmed that the imported LED Lights are for solar or wind energy use. It appears from the examination report that the imported items are for general use as these are operative / works under alternating current (AC) of voltage ranges 220-240 volts which is the normal thermal / hydral power sources normally produced and used in Pakistan. The images scanned by the examination staff and examination report shows goods are operative at voltage as 220 – 240 volts.
It is an undeniable proof that the imported goods are not meant for to work / operate with the renewable energy sources like Solar Energy or Wind Energy. Further it transpires that the imported goods operate on alternating current (AC) voltage rather than on direct current (DC) which is used / and operate in the renewable energy technologies. Therefore, the concessions under the claimed notifications are not available to the subject imports.
Therefore importer M/s ZAH Enterprises, Lahore, has been instructed to pay the short paid duties/taxes at the earliest.
