KARACHI: Directorate General of Post Clearance Audit (PCA) has detected evasion of duty/taxes amounting to Rs 1.998 million by M/s Sheikh and Company through taking illegal benefits of SRO 659(I)/2007, it is learnt.
The case was detected by Assistant Director Sajid Ali Baloch while scrutinising import data of spray paint.
Sources informed that M/s Sheikh and Company imported four consignments of belts strips/ composition leather under PCT Heading 4115.1000 on payment of reduced rate of sales tax, additional sales tax and corresponding income tax by mis-declaring the goods under PCT Heading 4115.1000 and illegally availing the benefit of SRO 1125 (I)/2011 dated December 31, 2011. However, the subject goods are correctly classifiable under PCT 4203.3000 attracting 20 percent customs duty, 17 sales tax, 3 percent additional sales tax and 6 percent income tax.
Thus, by way of mis-declaration of classification, the company evaded/short paid Rs 1,998,138, the sources added. Therefore, the Importer has violated the provisions of Section 32 (1) (2) and (3A) of the Customs Act, 1969, Section 3, 6 and 7 read with Section 34 of the Sales Tax Act 1990 and Section 148 of Income Tax Ordinance, 2001 punishable under clauses (1), and 14 of Section 156(1) of the Customs Act 1969, Section 33(5) of the sales tax Act, 1990 and Section 148 & 182 of Income Tax Ordinance 2001 and section 7A of the Sales Tax Act 1990 read with chapter X of the Sales Tax Special procedure Rules 2007(special procedures for payment of sales tax by the importers) and under relevant provisions of Income Tax Ordinance, 2001.
Accordingly, an audit observation was issued to the importer for explaining and clarifying as to on what basis it avoided/ evaded the leviable duty and taxes. The importer, however, failed to come up with any tangible evidence and explanation and was also unable to refute the charges leveled by the Department.
In view of the aforesaid, the PCA observed that the importer intentionally evaded the taxes and sent contravention report to adjudication for further proceedings in the case.
