KARACHI: The Collectorate of Customs Adjudication-I has issued a show cause notice against M/s A D Collection for tax evasion of Rs 404,895 by claiming undue benefits of SRO 1125(I)/2011 on import of shirting fabric.
During the scrutiny of data of importer relating to claiming admissible/inadmissible concessions in taxes accorded under SRO 1125(I)/2011 dated 31.12.2011, Post Clearance Audit-Karachi found that M/s A D Collection imported consignments of Man Made Shirting Fabric boy/girls pants up to 12 years and allegedly availed the benefits of concessionary rate of sales tax and income tax.
It may be mentioned here, that the concessions offered vide SRO 1125(I)/2011 dated 31.12.2011 are only admissible to manufacturers of goods covered in the five sectors only as highlighted in the conditions given in the said notification.
It transpired that the status of M/s A D Collection is that of an importer/ exporter/retailer and the concern was not registered as a manufacturer at the time of subject imports.
Therefore, an amount of Rs 404,895 has been short paid/evaded by the importers on account of paying concessionary rate of sales tax and withholding income tax otherwise not admissible to them.
Accordingly, an audit observation was issued to M/s A D Collection for explaining and clarifying as to on what basis concessions were availed by them even when they were not manufacturers at the time of subject imports and thus legally ineligible for concessions accorded vide SRO 1125(1)/2011 dated 31.12.2011. The importers however failed to come up with any tangible evidence and were also unable to refute the charges leveled by the department.
In view of the aforesaid M/s A D Collection are held to have intentionally and willfully caused loss to the government exchequer amounting to Rs 404,895 by illegally availing benefits of SRO 1125(1)/2011 dated 31.12.2011 which was evidently not admissible to them at the time of import.
The hearing in this case has been fixed for 27.8.2015 at 11am before the Deputy Collector, Customs Adjudication-I Amanullah Soomro.
