KARACHI: The Post Clearance Audit (PCA) has detected tax evasion of around Rs 500,000 by M/s ASK Technologies on import of LED flood lights by availing undue benefits of Fifth Schedule.
The PCA has also issued an audit observation under Section 26 and 32 of the Customs Act, 1969.
The PCA, while auditing import data, found that importer M/s ASK Technologies imported LED flood flights through Model Customs Collectorate Preventive and claimed the benefits of Fifth Schedule.
Sources said that 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 officials in their examination report have not confirmed that the imported LED lights are for solar use.
It appears from the examination report that the imported items are for general use operative under the normal thermal/hydel power sources normally used in Pakistan. The images scanned by the examination staff and examination report shows the operative voltage as 90-305 volts, which is the standard voltage used in Pakistan produced by hydel/fuel based power.
It is an undeniable proof that the imported goods are not meant for 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.
The importer has been asked to pay the evaded/short-paid amount at the earliest.
