KARACHI: The Post Clearance Audit – Karachi Directorate – has detected tax evasion of Rs 113,631 by M/s Electroline on import of LED lights by availing undue benefits of Fifth Schedule. In this regard, the PCA has also issued an audit observation under Section 26 and 32 of the Customs Act, 1969..
According to sources, the PCA officials, on scrutiny/audit of import data found that M/s Electroline, Karachi imported declared to be “LED lighting luminaire” through Customs Preventive and claimed the benefits of Fifth 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 use, according to sources.
It appears from the examination report that the imported items are for general use operative under the normal thermal/hydal 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 hydra / 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 PCA officials directed the importer M/s Electroline to deposit the short-paid amount of taxes at the earliest.
