KARACHI: The Customs Post Clearance Audit (PCA) Karachi issued Rs 3.23 million contravention report against M/s Lyallpur Chemicals and Fertilizers Limited Lahore Road Jaranwala for taking illegal benefits under SRO 551(I)/2008 dated 11.6.2008.
The scrutiny of import data by the officials of the PCA revealed that M/s Lyallpur Chemicals and Fertilizers had imported a consignment vide GD No. KAPR-HC-60588 dated 22.1.2011 under PCT heading 2510.1000 through MCC Appraisement (West) Custom House, Karachi, containing “Natural Rock Phosphate 30 percent Un-Ground” and got the consignment cleared on payment of 1 percent Income Tax, by claiming SRO 551(I)/2008 dated 11.06.2008, for sales tax.
The claimed SRO for sales tax exemption is issued under section 13 of Sales Tax Act 1990, therefore, the same is not covered under zero rating regime of sales tax for the application of clause 9 of section 148 of the Income Tax Ordinance 2001 for payment of income tax at the rate of 1 percent.
The importers were required to pay income tax at the rate of 3 percent vide clause 9-A part II to the section 148 of the Income Tax Ordinance 2001 and anti-dumping duty. Therefore, it violated the provisions of Section 32 (1) (2) & (3A) of the Customs Act, 1969 and Income Tax Ordinance 2001 punishable under clauses (1), (9) and 14 of Section 156(1) of the Customs Act, 1969 and punishable under relevant provisions of Income Tax Ordinance 2001.
Thus, an amount of Rs 3.23 million has been short paid/evaded by the importers on account of withholding income tax and anti-dumping duty. Therefore, M/s Lyallpur Chemicals and Fertilizers has violated the provisions of Section 32 (1) (2) & (3A) of the Customs Act, 1969, punishable under clauses (1), (9) and 14 of Section 156(1) of the Customs Act, 1969 and punishable under the relevant provisions of Income Tax Ordinance 2001.
Accordingly, an audit observation dated 14.04.2015 was issued to M/s Lyallpur Chemicals and Fertilizers Limited, Lahore Road, Jaranwala, but the importer failed to clarify their position regarding short payment of Income Tax as required under the Income Tax Ordinance 2001.
