KARACHI: The Directorate of Post Clearance Audit (PCA) has detected tax evasion to the tune of Rs 6 million committed by M/s R J Corporation on import of LED panel light, LED down light, SMD panel light and LED flood light outdoor.
The PCA has also served an audit observation to the importer under Section 26 and 32 of the Customs Act, 1969.
The PCA, while scrutinizing import data, found that M/s R J Corporation imported LED panel light, LED down light, SMD panel light, LED flood light outdoor through the Model Customs Collectorate Appraisement-West, and claimed benefits of Fifth Schedule (Customs Duty) Part I-24, Sixth Schedule (Sales Tax)-15.2-25/06/20 and Income Tax at 0 percent CL77 PT-IV 2nd Schedule ITO-10.
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 images scanned by the examination staff and examination report shows goods are operative at voltage as 85-265 volts, alternating current.
Therefore, it is evident that the imported items are for general use as these are operative/works under alternating current (AC) of voltage ranges 85-265 volts, which is the normal thermal/hydel power sources normally produced and used in Pakistan. 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. As 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.
And, therefore importer M/s R J Corporation has been asked to pay the evaded duties/taxes at the earliest.
