Daily on www.customstoday.com
Find us on
PAkIsTAn’s fIRsT InDEPTh nEwsPAPER on CusToms
26 AbC Certified vol 65 Issue no. 30
karachi, Tue Apr 17 - mon Apr 23, 2018
Regd. no, mC-1381
Price Rs. 50.00
ConfIsCATIng bETEl nuTs
HyderabadCustomsseized 12bags,660kgofbetelnuts,worth Rs1.7millioninvolvingcustoms dutyandtaxesofRs591855. | sEE PAgE 02 | ImPounDIng vEhIClEs
— Exclusive Customs Today photo
Quetta Customs took into possession Iranian diesel, smuggled goods along with NDP vehicles worth Rs151.91m. | sEE PAgE 02 | PosTIng gRowTh
Saeed Jadoon’s Peshawar Customs House collected Rs16459.36 million up to March 2018 showing a growth of 22.04%. | sEE PAgE 04 | ImPounDIng ITEms
Multan Customs ASO took into possession smuggled goods and vehicles valued at Rs49.31 million. | sEE PAgE 10 |
wais Agha, Chief Collector, North Region, highlighted the need to focus on customs automation, computerization, facilitation and infrastructure related matters during the collectors’ conference recently held at the Customs House Islamabad. The Chief Collector North Region chaired collectors’ conference at MCC Islamabad building where all the collectors of the Customs North Region, comprising Model Customs Collectorates Islamabad, Peshawar, Sialkot and GilgitBaltistan, participated. Talking to Customs Today, Additional Collector MCC Islamabad Ishfaque Khan said that the Collector
Islamabad updated the Chief Collector about the new developments regarding the NIIA while shortage of customs staff to run the operations of the NIIA was also discussed. Ishfaque Khan said that the Chief Collector North showed his satisfaction over the revenue collection as well as anti-smuggling performance of the MCC Islamabad which was demonstrated during Oirst three quarters (July to March) FY17-18 while chasing of revenue targets under all the heads during the last quarter (April to June) FY17-18 also came under discussion. He further said that the Chief Collector North Region was asked to encourage those staffers and ofOicers who showed excellent performance but discourage those who violated the customs bylaws. The Chief Collector also asked the Collector of North Region Ch. ZulOikar Ali to facilitate the business
community to get more revenue for the national exchequer. The Chief Collector asked Collectorate of North Region to evolve a strategy to eliminate menace of smuggling. The construction of new Customs houses at GilgitBaltistan and Torkham also came under discussion during the collectors’ conference. Meanwhile, the Customs North Region has been assigned a revenue target for the month of April 2018 with an amount of Rs2999million under all the heads, correspondent of Customs Today learnt. According to details explained by official sources of the North Region, the MCC Islamabad has been allocated Rs1281.83 million target under all heads of duties and taxes for the month of April 2018. The MCC Peshawar has been assigned target of Rs1709.90mil-
lion of all duties and taxes for the month of April 2018 while MCC Sialkot has been allocated Rs37.53 million and MCC GilgitBaltistan has been earmarked an amount of Rs44.89million under heads of all taxes for the month of April 2018. The North Region has been assigned Rs1206.02 million as Customs Duty (CD) for April whereas Rs1140.19 million under the head of Sales Tax (ST), Rs32.78 million of Federal Excise Duty (FED) while Rs620.10 million as Income Tax (IT) for April 2018. The sources confirmed Customs Today that the North Region was assigned Rs2834.72million revenue target for the month of March whereas it was assigned Rs2437.28million under all heads for the month of February. The North was earmarked Rs2874.65 million of all taxes for January 2018.
APRIL 17 - APRIL 23, 2018
shC seeks reply on petition filed by m/s usman logistics
KARACHI: The Sindh High Court (SHC) has issued notices to the Customs Department and deputy attorney general on a constitutional petition filed by M/s Usman Logistics (Private) Limited, seeking restoration of its clearing agent license/NTN number/ user ID password blocked by customs authorities due to allegedly involved in ISAF scam. While hearing of the petition, a two-member bench, headed by Justice Munib Akhtar, also directed them to file their respective para wise comments on the next date of hearing.
QuettaCustoms impoundsvehicles, diesel,otheritems valuedatRs151.91m
he Model Customs Collectorate (MCC) Quetta, Enforcement Squad, took into possession Iranian diesel, smuggled goods along with NDP vehicles worth Rs151.91million during March FY17-18. According to details explained by Ashraf Ali, Collector, Model Customs Collectorate (MCC) Quetta, that the Enforcement Squad of the MCC Quetta showed satisfactory performance during the month of March FY17-18. The collectorate received Rs20million extra revenue by impounding miscellaneous goods and vehicles against the same corresponding FY16-17. The ASO Quetta conOiscated worth Rs151.91million smuggled goods during March FY17-18 while it seized worth Rs121.899million goods during the identical previous FY16-17. Telling about the further details, he said that the Anti-Smuggling Organization (ASO) Quetta took into possession fewer vehicles during the month of March FY17-18 against the same corresponding Oinancial year whereas inpounded vehicles’ value showed increase against the previous duration.
Customs Export retrieves Rs10.45m from two companies
Customs Appraisement East collects Rs4321m, west generates Rs4248.98m KARACHI
wAQAR AhmED AnsARI www.customstoday.com
he Customs Collectorate, Appraisement East, has earned Rs4321million of customs duty, sales tax, income tax and federal exercise duty during Oirst 10 days of April. Sources told Customs Today that the Customs Appraisement East received Rs2478million as customs duty, Rs845million of sales tax, Rs714million as income tax and Rs14.25million under the head of federal excise duty during 10 days of April. If we talk about first 15 days of corresponding month of March, the Customs Collectorate, Appraisement East, has generated Rs6633million under the heads of customs duty, sales tax, income tax and federal exercise duty during first 15 days of March including Rs3452million of customs duty, Rs1628million as sales tax, Rs1447million of income tax and Rs16.58million under the head of federal excise duty during 15 days of March. In the whole month of March, the Customs Collectorate, Appraisement East, has generated total Rs39billion, Rs120million under the heads of customs duty, sales tax, income tax and federal exercise duty including Rs14billion and Rs225million under the head of custom duty, Rs18billion and Rs835million under the head of sales tax, Rs5billion, Rs114million under the head of income tax and Rs83million of FED. Meanwhile, the Customs Collectorate, Appraisement West, has col-
lected Rs4248.98million of Customs Duty, Sales Tax, Income Tax and Federal Exercise Duty during first 10 days of April. Sources told Customs Today that the Customs Appraisement West received Rs2847million as Customs Duty, Rs741.25million of Sales Tax, Rs648.87million as Income Tax and Rs12.58million under the head of Federal Excise Duty. If we talk about Oirst 15 days of previous month of March, the Customs Collectorate, Appraisement
West, has generated Rs6269.76million of Customs Duty, sales tax, income tax and federal exercise duty during Oirst 15 days of March including Rs3247million as customs duty, Rs1458million of sales tax, Rs1547million of income tax and Rs17.42million under the head of federal excise duty during 15 days of March. In the whole month of March, the Customs Collectorate, Appraisement West, has earned Rs26billion, R801million under the heads of customs duty, sales tax, in-
come tax and federal exercise duty including Rs13billion, Rs208million of custom duty, Rs9billion, Rss803million as sales tax, Rs3billion, Rs508million under the head of income tax and Rs161million under the head of FED. Source said that the Collector, Appraisement West, is fully hopeful to achieve the target in the end of fiscal year as we achieved our target in the end of June and we are fully confident that we are going to achieve a high target.
hyderabad Customs confiscates 660kg of contraband betel nuts T
AslAm AnJum QuREshI
— Exclusive Customs Today photo
ollector Customs Export Saqif Saeed has said that we are investigating two defaulter companies namely Fari Associates and Muneeb Auto Parts again. The collector said these companies exported some consignments seven months ago. Before sending notices to them, the collector export will check documents and send them show cause notices. On the other hand, Customs Export has served show cause notices on two defaulter companies and recovered evaded amount of taxes and duties of Rs10.45million. Sources told Customs Today that, during a scrutiny of the import data, it was revealed that M/s Naveed Pana Makers availed undue beneOits and concessions after importing different consignments of various tool sets by misusing the SRO 560 through Examiner Saleem Aiwan on December 5, 2017.
he Anti-Smuggling Organization (ASO) Hyderabad, Customs Preventive Sukkur-Jacobabad, seized 12 bags, 660kg of betel nuts, worth Rs1.7million involving customs duty and taxes of Rs591855 during an action at customs check-post Jacobabad during Oirst week of April 2018. Collector Model Customs Collectorate Hyderabad Akhlaq Ahmad Khattaq directed his staff to frustrate the smuggling attempts in the region. Additional Collector Dr Aamer Nawaz Hamid received a tipoff regarding the smuggling of foreign origin contraband and non-custom-duty paid betel nuts. He formed a team, comprising
Collector Akhlaq Ahmed khattak
ASO Customs Preventive, Sukkur check-post Jacobabad ofOicer and other staff. The ASO team intercepted a public vehicle transport and recovered the said goods. Prior to the recovery of items, the ofOicials asked the driver to produce
documents regarding the legal import of the goods but he could not prove anything. The team impounded the items under the Customs Act. A case was registered against the accused. The case has also been sent to the customs adjudication for further legal action. The ASO deposited the conOiscated goods into Sukkur State Warehouse. Meanwhile, the Collectorate enhanced the checking on the main routes of the city. Due to these strict measures, the customs authorities foiled many attempts of smuggling. The Model Customs Collectrate’s ASO Hyderabad, Customs Preventive Jacobabad, has impounded foreign origin non-duty-paid nine small bags of black tea weighed 405 kilograms worth Rs202500 involving duties and taxes of Rs72637in a crackdown during the Oirst week of April 2018.
Margallah Dry Port processes 2,494 GDs & clears 2,994 containers
he Margallah Dry Port Islamabad processed 2494 Goods Declarations (GDs) and cleared 2994 containers of imports during three Quarters (July to March) FY17-18. According to details explained by sources of the Islamabad Dry Port (IDP) that, during above said period, the IDP showed satisfactory performance and maintained surplus revenue performance. During the month of March FY17-18, the IDP processed 180 GDs while cleared 250 imported containers. The IDP processed 173 GDs and cleared 215 containers during February FY1718 while processed 344 GDs and cleared 400 consignments during January FY17-18.
APRIL 17 - APRIL 23, 2018
m/s Al shaikh Associates moves shC challenging vR no 1268/2018
KARACHI: M/s Al Shaikh Associates has moved a constitutional petition in the Sindh High Court (SHC), challenging Valuation Ruling No 1268/2018 dated 7/3/2018, enhancing 100 percent valuation on import of roller chain imported by it. During the hearing of the case, counsel for the petitioner stated that the petitioner imports roller chain and always fulfills his liabilities in accordance with law and never involved in any crime.
TP mega scam unearthed: Customs oﬃcial Dost facilitates betel nuts, drugs, liquor smugglers KARACHI
CusToms ToDAY REPoRT www.customstoday.com
few ‘corrupt’ customs ofOicials at Karachi ports have started clearing smuggled goods through ‘TP’ as they have changed their action plan of clearing illegal goods from ‘green channel’ and ‘yellow channel’. This nexus of corrupt ofOicials has been playing in the hands of smugglers at Karachi East Collectorate. Customs Today unearthed the misuse of green channel, yellow channel and now TP facility but FBR and Customs high-ups paid no heed to so much media coverage against corrupt practices at Karachi ports by its own staff. Banned and restricted items including dangerous chemicals, betel nuts and drugs have been poured into Pakistan through green channel & yellow channel, showing a close connection of these crooked customs elements with smugglers. Now they are removing these goods through TP from Karachi East Collectorate, without any checking. TP means Transshipment Permit and it is used in smuggling of banned items from the port because TP is not checked at Karachi port. Customs ofOicials put a seal at the door of the container as these goods would be checked at its destination like Lahore where the clearance would take place. In TP smuggling, the GD-TP is Oiled at the collectorate where the goods have arrived like Karachi east collectorate. The smugglers Oile wrong goods. Like when banned betel nuts or liquor say weighing 8 tons is in the container, then they Oile iron scrap weighing 8 tons. The goods are released from the port without checking. According to S.R.O.174(I)/2013, the importer has 7 days to make the goods reach the port of destination. It generally takes only 3 days for a container to reach Lahore. Hence, the smugglers take the container Oirst to their own warehouse. They have lot of time available hence they peacefully remove the walls of the container through special equipment. Then
they remove the banned goods like harmful betel nuts, liquor, drugs etc. and then replace it with 8 tons of iron and steel scrap and close the walls of the container. Then from their godown they send the container to the Lahore dry port. At Lahore dry port, the goods are cleared smoothly as it contains iron and steel scrap as declared at Karachi east collectorate. Earlier there was also a question that whether there is a department within the collectorate to monitor data, docs, etc. so that such smuggling do not occur at the ports itself? Yes, there is a department at Karachi East Collectorate called R&D (research and development). Its primary duty is to closely supervise the data, docs, etc. so that no smuggling happens using green/yellow channel or using TP. But this department is controlled by Dost Muhammad, the principal appraiser there who is a corrupt ofOicial and also unqualiOied person for the post. Customs Today recently received a video where it could be clearly seen that a container of betel nuts was seized but customs staff was negotiating to release the container after taking bribe. Betel nuts were hidden under chemicals so that it can be cleared under the garb of allowed low value chemicals. This video is important as customs staff is seen in that video around the smuggled
drums of betel nuts that are hidden inside under the chemicals. Customs staff is saying that these betel nuts were caught because ‘negotiations’ failed. Obviously these ‘negotiations’ are about deciding exact bribe amount to be paid. This is at PICT port which falls under the Karachi east collectorate where Dost Muhammad handles R&D department. This R&D department is responsible to keep a check on documents and data of green channel, yellow channel, red channel to avoid any unscrupulous activity through these channels. But he did nothing to stop any wrongdoing through these channels. Following is a letter of an importer sent to the Collector Karachi Appraisement East who has clariOied how Dost is a criminal and corrupt person and also how he is unqualiOied to be placed at the post: We have already apprised you that Mr. Dost Muhammad who is presently serving as incharge of R&D department is involved in a lengthy series of serious crimes: 1. He blackmails the genuine legal importers to fulOill personal agenda. 2. He spreads false information and propaganda against the legal importers merely to achieve personal goals. 3. He is abusing his ofOicial post so as to achieve personal objectives. 4. He claims to be running parallel commercial activities which are not allowed under the law. It is obvious that he is protecting those activities by abusing his ofOicial post. 5. He is incharge of R&D department whose primary work is to check data of shipments and ensure that green channel, yellow channel and TP
smuggling does not occur at the port. But instead of controlling such smuggling at the port, he is protecting and facilitating such smugglers. 6. He is ofOicially a junior post person but illegally assigned to work at a senior post in R&D. This is one reason why above 3 kinds of smuggling does not stop even at your port despite your efforts. Such assignment at a higher post is not only illegal but also shows his powerful corrupt backing and lobby. 7. He is running a clearing agency under the name of his brother. He protects, using his official post, all the illegal work conducted there. This letter proves how smugglers bring their billions of rupees worth goods at Karachi ports without any hesitation and with the support of corrupt customs officials like Dost Muhammad. They get full support and patronage from these corrupt officials, otherwise they could have smuggled these goods from long porous borders. Legal and genuine importers appealed to the NAB and FIA to take prompt action against corrupt principal appraiser Dost Muhammad to catch red-handed the hundreds of containers Oilled with illegal goods at Karachi East Collectorate.
fbR and Customs high-ups paid no heed to so much media coverage against corrupt practices at karachi ports by its own staﬀ
APRIL 17 - APRIL 23, 2018
Customs Court rejects bail petition of accused involved in wine smuggling
KARACHI” The Customs Court Judge Syed Faiz Rasool Rashdi rejected bail application of suspect namely Ashok P. Jethmilani son of Jethmilani, who was booked in a case of attempting to smuggle non-duty paid 5844 win bottles, after the rejecting bail, customs officials arrested him and sent to customs lack up. During the hearing, above mentioned suspect appeared before the court along with his counsel and moved bail application, counsel argued that applicant is innocent and has falsely been implicated by the agency in this case.
Peshawar Customs posts 22.04pc growth with Rs3097.75m profit PESHAWAR
Faisalabad Adjudicationretrieves Rs48.522millionby settlingvariouscases FAISALABAD
he Customs Adjudication Faisalabad recovered Rs48.522million after deciding different seizure cases during the month of March of Fiscal Year 2018. Sources told Customs Today that the adjudication settled almost 30 smuggling cases during the month of March. The Customs Adjudication issued order in favor of the Customs Anti-SmugglingOrganizations, Sargodha, Mianwali, Jhang, Sara-eMuhajir and Customs Intelligence and Investigation, Regional OfOice, Faisalabad. The cases included smuggling of clothes, tea, auto part, Iranian diesel, Rani Juice, LCDs, LEDs, remotes, remote covers, mobile phones, old and used machinery, children shoes, grey fabrics and used laptops, Toyota Corolla vehicles, land cruiser, powder, sulphate, yarn, almond and other items. Collector adjudication Asif Abbas decided three cases of Rs19.998million while Additional Collector (ADC) Asma Hameed settled nine cases involving Rs18.998million. Similarly, Deputy Collector Saima Ayaz (DC) decided 30 cases involving Rs48.522million and announced decisions in favor of the Customs Intelligence and Investigation during above said period. Meanwhile, the Faisalabad Customs Adjudication adjourned the hearing of 126 seizure cases worth Rs3785.003million during the month of March 2018.
— Exclusive Customs Today photo
he last nine months’ collection performance of the Modal Custom Collectorate Peshawar was outstanding as, during the period, the house collected Rs16459.36million up to March 2018 against Rs13331.61million up to March 2017 with a difference of Rs3097.75million income while the difference in percentage was 22.04 percent. Under the head of custom duties, the Custom House Peshawar generated Rs6699.22million by March 2018 against Rs5049.89million of March 2017. The difference was recorded as Rs1649.33million while the difference in percentage was 32.66 percent. Under the head of Federal Excise Duty on palm oil, the house collected Rs1674.20million till March 2018 against Rs1291.82million in March 2017. The difference in rupees was recorded Rs382.38million while the difference in percentage was 29.60. Likewise under the head of Sale Tax Value Addition on commercial importers, the house earned Rs562.06million by March 2018 against Rs466million of March 2017. The difference in rupees was recorded Rs96.06million while the difference in percentage was 20.61. Under the head of Federal Excise Duty, the house got Rs166.47million up to March 2018 against Rs131.59million of March 2017 with a difference of Rs34.88million
Collector saeed Jadoon
while the difference in percentage was 26.51. Under the head of withholding tax, the house collected Rs3434million against Rs3230mil-
lion in March 2017. The difference in rupees was Rs203.54million whereas a difference in percentage was 6.30.
Multan Adjudication decides 44 seizure cases of Rs45.097m
ImRAn AlI khAn
ustoms Adjudication Multan Camp OfOice decided 44 seizure cases of worth Rs.45.097 million during the month of March. According to the details, Customs Adjudication was presented 108 different seizure cases for trial during March 2017-18. Customs Adjudication collector, additional collector and deputy collector conducted trial of these seizure cases according to authorized power to adjudicate cases as per their rank and amount of duties and taxes involved against seized or conOiscated goods. These seizure cases were detected by Directorate of Customs Intelligence and Investigation and Multan Anti-Smuggling Organization in their different actions in the jurisdiction. Deputy Collector Saima Ayyaz has decided 30 different seizure cases of Rs7.147 million during the month of December while 36 fresh seizure cases has been added for hearing in Customs Adjudication in March to deputy collector. Deputy collector issued one judgment of seizure case in favor of taxpayer due to insufOicient evidences during March. Additional Collector Customs Adjudication Talib Hussain decided as many as 12 seizure cases which involved revenue of amounting Rs18.800 million for the period ofMarch.Thedecidedcaseofadditional Collector Customs Adjudicationincludesdifferentsmuggled cases of vehicles and other goods. Additional Collector has decided all seizure cases in favour of Customs department after conclusion of trial and on the basis of evidences.
Customs Adjudication-II retrieves evaded taxes T
CusToms ToDAY REPoRT www.customstoday.com
he Customs Adjudication-II has sent a show-cause notice to a defaulter company and recovered Rs4.12million. Source said that the company Mubbashir and Sons was allegedly involved in a tax evasion. The company imported new and used leather jackets from USA on August 16, 2017 on the charge of mis-declaration/description. The Customs Adjudication-II had advised the said company to pay R5million within 7 days. Through another notice, the Customs Adjudication-II received Rs4.12million in response to a final notice served
on a defaulter company named M/s K K & Company. M/s K K & Company was allegedly involved in a tax evasion. The company imported different kinds of cosmetic items, including lipsticks, nail polishes, brushes and various kinds of shampoos, in the month of November 2017 which was examined through Wahid Muhammad who used the wrong PCT heading. After a careful investigation, the Customs Adjudication-II issued a Oinal notice to the company on 4th of April. The company cleared the amount on Wednesday. Source said that Collector Adjudication-II Tahir Qureshi said that, in the month of April, we are investigating 13 cases of defaulter companies.
www.customstoday.com APRIL 17 - APRIL 23, 2018
â€” Exclusive Customs Today photos
www.customstoday.com APRIL 17- APRIL 23, 2018
APRIL 17 - APRIL 23, 2018
muhAmmAD fAIZAn www.customstoday.com
he Federal Board of Revenue (FBR) has announced that the taxpayers from salaried classes, including government ofOicials and private sector employees, have been excluded from the FBR’s audit list. Chairing the ceremony for Computerized Balloting for Audit, Advisor to PM Haroon Akhtar Khan said that tax amnesty scheme is in the interest of Pakistan and it has not been designed for any particular sector or specific persons. He added that the government had successfully fulfilled all the promises it made with the business community during the last five years. “The business community asked us for amnesty, we gave them; they asked us for lowering the tax rates, we did that; in some cases, we gave them even more relief than what they asked and the entire purpose of facilitating the business community was to foster business activities, promote growth and generate more revenues in the process,” he said. He said the government had bridged the gap between the business community and the tax collectors and it was expression of the trust and confidence that the government reposed in the taxpayers and the general public. “The taxpayers have surely responded to
that by helping FBR achieve several milestones on the revenue growth front but the onus now lies on the nonfilers to come forward and pay their due share of taxes by benefiting from the incentives and facilitation FBR has offered them,” he said. Earlier, parametric computer ballot as per Audit Policy 2017 was held for selection of cases for audit for Tax Year 2016 and tax period from 1st July, 2015 to 30th June, 2016, in respect of income tax, sales tax & FED. Haroon Akhtar Khan and representatives of Federation of Pakistan Chamber of Commerce and Industry (FPCCI), Institute of Chartered Accountant of Pakistan (ICAP), Pakistan Tax Bars Association (PTBA), Islamabad Women Chamber of Commerce and Industry, Islamabad Chamber of Commerce and Industry, Rawalpindi Chamber of Commerce and Industry and FBR ofOicers were also present on the occasion. Highlighting the economic and tax policies of the government, Haroon Akhtar Khan underscored the importance of audit in a country like Pakistan where universal self-assessment scheme is prevalent. He elaborated that in order to facilitate the taxpayers, it was decided that the case of a taxpayer once selected for audit under section 214C of Income Tax Ordinance 2001, section 72B of the Sales Tax Act 1990 and section 42B of the FED Act 2005
will not be selected for audit for next (consecutive) two tax years. For such purpose, base year would be Tax Year 2015 for Income Tax & Tax Periods July 2014 to June 2015 for sales tax & federal excise duty (FED). He further added that all cases of income exclusively from salary and where the salary exceeds 50% of taxable income would are excluded from this parametric computer balloting. However, the salary cases having business income were not excluded from this balloting. The minister assured that the tax audit would be conducted in a professional and transparent manner. The selection was based on risk parameters resultantly compliant taxpayers would not be selected. Later on, computer ballot was conducted in respect of six categories i.e. corporate cases of income tax, sales tax and FED & non-corporate case of income tax, sales tax and FED. Resultantly the cases were selected for audit for Tax Year 2016. The cases have been selected for audit in respect of six categories. According to details under Income Tax (Corporate) 1,499, Income Tax (Non-Corporate) 34,515, Sales Tax (Corporate) 1,274, Sales Tax (Non-Corporate) 7,532, Federal Excise Duty (Corporate) 28, federal excise duty(non-corporate) 20 has been selected. The total number of audit cases is 44,868. National Tax Numbers/CNICs of cases selected for audit would shortly be displayed on the ofOicial website of FBR. The Audit Policy 2017 for Tax Year 2016 has been placed on the ofOicial website of FBR.
khtar A n o o r a h the d e r o c s r unde udit in a f o e c n importa like Pakistan a country universal where sment s self-asse revalent sp scheme i
APRIL 17 - APRIL 23, 2018
Founder & Chairman Zulfiqar Ali Editor Rahil Yasin firstname.lastname@example.org For advertising & subscription email@example.com www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore
new policy for tax audit selection
ccording to the media reports, the Federal Board of Revenue has approved a new audit policy to make the selection of taxpayers more parametric, transparent and in conformity with the law. Earlier, the Lahore High Court had stopped the federal government from enforcing the audit policy allegedly because of the lack of transparency in the selection process of the taxpayers. The court ruling came after a petitioner challenged unbridled and unrestricted powers enjoyed by the tax authorities under the audit policy, allegedly creating a milieu of witchhunting and harassment among the genuine taxpayers. The LHC had then ruled that no audit policy could be enforced until the FBR frames risk parameters on the basis of which the taxpayers are selected for audit. The FBR authorities now claim the new audit policy will be compatible with the prevailing laws in line with the directions of the court. Except the case of income tax, the risk parameters for selection of audit cases of sales tax and federal excise duty have been revealed in the policy. The Income Tax Ordinance bars the authorities from disclosing the risk parameters. Under the new policy, the cases once selected for audit through ballot, will not be selected for another audit for the next two tax years under section 214C, section 72B of the Sales Tax Act 1990 and 42B of the Federal Excise Act 2005. In the next computer balloting, which is going to be held in a day or two, at least 7.5 percent cases will be selected for audit out of the total filers after exclusions. It means all previous cases, which were selected for audit, will be excluded from the balloting. At least 925,000 audit cases are pending before the authorities for a decision. At least 10 percent reduction in value addition in manufacturing and more than 30 percent sales or purchases to or from nontaxpayers will qualify a taxpayer to select him for the audit. When a system incorporates new changes in it, one must keep the exercise as simple as possible. But it is generally observed that change in the system brings more troubles for the taxpayers than facilitation. Devising the criteria with labyrinths of this way or that way makes the changes a futile exercise. It necessary that strings of conditionalities should not be attached with concessions to allow the tax officials to work within their domains and the taxpayers to fulfill their obligations in a comfortable manner.
Dream of economic recovery T
DR AfTAb AfZAl
he government ministers are posing rosy picture of the economy, as many indicators are showing signs of recovery, but the country still has to go a long way to achieve macroeconomic stability. The world financial institutions had projected six percent growth in the gross domestic product, but at least 5.6 percent is expected to be achieved during the current fiscal year. The overall economy of Pakistan is not performing well and is continuing to face internal and external challenges. The chaos on the political horizon has adversely affected the pace of development in the various sectors of the economy. The PML-N government under Nawaz Sharif had claimed it will end energy shortage and incessant power supply will be ensured to the
industry, but load shedding has again started haunting the industrial sector. Exports have picked up to some extent and it is now up to the government to sustain its policies. There is modest increase in inOlation while growing Oiscal and current account deOicits are appearing as challenges in the coming months. The prime minister has launched tax amnesty scheme to bring the non-Oilers into the tax net. However, there is no change in standard operating procedure and this could foil all the attempts to regularize the tax system. The policymakers take the issue of structural reforms as certain steps to enhance the realm of indirect taxes. Otherwise, it is difOicult to avoid taxes if bank accounts of every individual are classiOied and closely monitored. The overall performance of the government remained subdued as it has failed to achieve any of the targets. After assuming the ofOice, the former prime
The country needs reforms not only in the administration and management sectors, but also in the departments and provinces
minister had declared that the only motto of his government would be business, business and business. Despite himself as a businessman, Sharif could not make any progress in any sector of the economy and even failed to streamline the administrative affairs. When administration is weak and incapable, no policy can achieve the desired results. The mandate of this government is going to end in a few months, but it is imperative for the mainstream political parties to do some homework before elections. The country needs reforms not only in the administration and management sectors, but also in the departments and provinces. It is hoped the economy would continue to grow at a steady pace and what the government needs to do is to minimize its interference in the businessmenâ€™s affairs. Laws also need to be improved to curtail the powers of ofOicial machinery which is the biggest hurdle in the growth of the economy.
APRIL 17 - APRIL 23, 2018
Tax & duty evasion committed by m/s shah gul fabric uncovered
KARACHI: Directorate of Customs Post Clearance Audit Director Nadeem Memon has detected the tax and duty evasion of Rs12million by M/s Shah Gul Fabric, it is learnt here. Sources told Customs Today that M/s Shah Gul Fabric located in West Wharf Karachi imported a consignment of various kinds of silk cloth and color matching digital machines and got them cleared from the PICT Karachi vide GDs on August 11, 2017 by paying customs duty lower at 10 percent after claiming the benefits of the SRO 566/2007.
he Director, Internal Audit, (Customs) asked the Model Customs Collectorate (MCC) Islamabad to provide detaild of cases relating to outstanding arrears, disposal of cases and their latest positions to present them to the Chairman FBR. Director, Internal Audit, Islamabad Sadiq Ullah Khan asked the Model Customs Collectorate (MCC) Islamabad through a letter No: 1(9) IAC(M)/2016-17/Ibd/218 for meeting for the discussion of the audit paras relating to the recovery of government revenue. The sources told Customs Today that Directorate of Internal Audit asked the MCC Islamabad with reference to the the meeting held on 03-04-2018 and subsequently presentation of the Director General Audit Lahore to the Chairman Federal Board of Revenue (FBR) on 05-04-2018 where the status of outstanding arrears, disposal of cases and their latest positions were highlighted. The sources further told CT that it has been decided that a follow-up presentation shall be given by the Director General to the Chairman on 17-04-2018 where cases wise detail shall be discussd. It was added that, in this regard, the Director, Internal Audit, asked the MCC Islamabad to arrange a meeting as soon as possible in which MCC Islamabad provide a list of cases relating to outstanding arrears, disposal of cases and their latest positions so that a plan can be made for recovery of government’s revenue.
wRITE To us YouR gRIEvAnCEs: Through CusToms ToDAY platform hElP DEsk, now you have chance to DIRECTlY write your problems to top govt. functionaries. If you have any grievances, queries, questions or suggestions, you can write in this section as it provides easiest access to you to approach Customs and Revenue authorities. who can write in this section? Importers & Exporters, Customs Agents, Chambers of Commerce, Trade Associations and Customs Officers To whom you can write? Honourable PM, Minister/Secretary for Finance & Revenue, Minister/Secretary for Ports and Shipping, FBR Chairman, Member Customs and Chairperson Senate/National Assembly Standing Committee on Finance & Revenue. Send your letters at: firstname.lastname@example.org
Customs values of galvanized iron & steel ceiling suspension system revised KARACHI
wAQAR AhmED AnsARI www.customstoday.com
he Directorate General of Customs Valuation has revised the customs value of galvanized iron and steel ceiling suspension system/tee-grid vide Valuation Ruling No 1281/2018 under Section 25-A of the Customs Act, 1969. Earlier the customs value of Galvanized Iron and Steel Ceiling Suspension System/Tee-Grid was determined under Section 25-A of Customs Act, 1969 vide Valuation Ruling No. 1120/2017 dated 06.04.2017. However, it needed revision to reOlect the current price trend prevailing in international market. This prompted an exercise to re-determine the Custom values of the subject goods under Section 25-A of the Customs Act, 1969. Meeting \\ ith stakeholders was held on 03.04.2018. The participants were requested to submit invoice of Imports made during last three months showing factual value. Websites, names and E-mail address of known foreign suppliers / manufacturers of the item in question through which the actual current value could be ascertained. Copies of contracts made / LCs opened during the last three months showing the value of items in question. Copies of Sales Tax paid invoices issued during last four months (excluding duty and taxes) to substantiate their contentions.
Representatives of Collectorate stated that the values are suppressed, keeping in view the increase in the value of its raw material, which are published internationally. Importers on the other hand, requested to decrease values of’ the (Galvanized Iron and Steel Ceiling Suspension System/Tee-Grid. They, however, did not submit any documentary evi-
— Exclusive Customs Today photo
Director Internal Audit directs Customs to submit details of cases
Dg valuation surriya butt dence to support their contentions. Valuation methods given in Section 25 of the Customs Act, 1969 were applied sequentially to address the valuation issue at hand. Transaction Value Method under Sub-Section (1) of Section 25 of the Act ibid was found inapplicable because there were wide differences in values
in the declarations. Identical /Similar Goods valuation methods provided in Sub-Sections (5) and (6) of Section 25 of the Customs Act, 1969 were examined for applicability to the valuation issue in the instant case which provided some reference values of subject goods but the same could not be exclusively relied on due to wide variations in the declared values of the subject goods.
Appeal to address issue of dual taxation To,
Federal Advisor on Finance, Revenue & Economic Affairs Islamabad Dear Sir,
I want to draw your kind attention towards our taxation system which needs urgent reforms. Harmonization in tax system across the country is also a must to get rid of the issue of dual taxation. Though amnesty scheme is a good step to bring out-of-country capital into the country but these measures cannot be productive until and unless major issues like “withholding tax on banking transactions” exist. Over the years FBR could not satisfy all of its stakeholders i.e. the State as
well as taxpayers with 1.2 million Oilers out of total population of 210 million fetching hardly revenue collection of 12 to 13% of the GDP and unhappy stakeholders across the board, speaks of FBR’s failure so far. It is further repeated from the international ranking of paying taxes, which is at present 172 out of 190 countries of world which indicates very
unhappy situation. Neither the existing system is economically neutral, taxpayer friendly, equitable, progressive nor facilitative and supportive to generate healthy business activities for all. Taxation is of course important source of revenue collection but tax policies must be based on the best international practices and universally accepted canons
of taxation. Various distortions in the existing tax policies can be removed if the feedback of all the representatives of business organizations is given due consideration by the FBR authorities. It is universally admitted fact that public policy makers can make noticeable difference by linking their mindset to ground realities. Section38-BofSalesTaxAct,1990isbeing adversely used by the ofOicials of tax department.Theyarepayingillegalvisits to markets and godowns to unjustiOiably harass the business people. They notonlytakecoercivemeasurestoraise unlawful tax demands without providing any supporting document but also carryalltheavailablerecordswiththem. Best Regards,
Malik Tahir Javaid, President LCCI, LAHORE
APRIL 17 - APRIL 23, 2018
smuggling of mobile phones & accessories from Quetta into karachi frustrated
KARACHI: Directorate Customs Intelligence and Investigation Quetta has thwarted a bid to smuggle noncustom-paid mobile phones, batteries, chargers and other accessories priced at Rs5.28million during a special checking. On Friday morning, sources told Customs Today that Director Customs Intelligence and Investigation Quetta Muhammad Akram Chaudhary received a tip-off that some smugglers are trying to smuggle said items from Quetta into Karachi.
multanCustomsimpoundsvehicles&items worth Rs49.31m in diﬀerent operations MULTAN
ImRAn AlI khAn
he Customs Anti-Smuggling Organization (ASO) Multan has took into possession smuggled goods and vehicles valued at Rs49.31million in various anti-smuggling activities during the month of March. The Anti-Smuggling Organization Multan has launched an intensive crackdown on the smuggled items and vehicles to stop the smuggling. The customs collectorate has enhanced the monitoring of various routes adopted for movement of smuggled vehicles and goods. The Multan ASO has increased the patrolling on the directions of Collector Ambreen Ahmad which is producing fruitful results. The Multan Customs Antismuggling Organization has took into possession 33 vehicles priced at Rs33.05million throughout the month of March. These impounded vehicles include Toyota Hilux Surf, Mitsubishi Pajero, Land Cruiser, Toyota Premio, Honda Civic, Suzuki Alto and other ones in March. The vehicles were found nontampered and tampered during examination of the Customs Anti-
smuggling Organization. The Multan Customs has also seized a huge quantity of apples, cloths and other miscellaneous items worth Rs16.26million. The customs has formed 40 seizure cases valued at Rs49.31million in March of the ongoing Oiscal year. On the other hand, it has detected 14 various seizure cases of Rs17.82million during the corresponding month of March 2016-17.
Meanwhile, The Customs Collectorate Anti-Smuggling Organization impounded three smuggled vehicles in their different action. According to details, Multan Customs Anti-Smuggling Organization has initiated crackdown against smuggled vehicles in the jurisdiction on the directions of Collector Ambreen Ahmad to curb non customs
paid vehicles. The Anti-Smuggling Organization (ASO) has enhanced the patrolling in the suspected areas of the Multan. Special teams of Anti-Smuggling Organization vehicle branch was asked to remain watchful on the road and given task to detect smuggled vehicles moving on the roads. Customs Anti-Smuggling Organization has taken two foreign
origin vehicles into their possession from Sahiwal during their patrolling. Both vehicles Suzuki Jimmny jeep of Model 2009 and Suzuki Kei of Model 1998 were found suspicious to Customs Anti-Smuggling Organization during their initial examination. Customs team asked the drivers of the vehicles to produce documents of said vehicle to justify their possession.
govt should have introduced rational economic policies at inception: monim sultan T
he government should have devised rational economic policies at the very beginning of its tenure. Economic policies of the incumbent government have failed miserably and the prime minister has announced the amnesty scheme as the last resort to get through the upcoming elections. These views were expressed by Lahore Tax Bar Association (LTBA) President Monim Sultan while reacting on the amnesty scheme in an interaction with Customs Today here. Monim Sultan said that the amnesty scheme at this crucial juncture, when the incumbent government is go-
ing to finish its five years in the rule, testifies that the government has failed to strengthen the economy during its tenure and now the stopover and short-term measures are being taken with a view to consolidate its position in the upcoming elections. He said had the economic policies been made in the larger national interests at the beginning there would be no chaos like situation in the country and the economy would have been made solid during the five years. He added that there is no logic in announcing the scheme at this very moment when there is hardly one month left to announce the federal budget. The amendments in the rate
of tax should have been undertaken by the finance bill, not by the ordinance and we see no successful execution of the amnesty scheme like the other five announced earlier. There is a dire need to take long term elaborative and systematic strategies to make the economy strong; the amnesty scheme is tantamount to oblige a few chosen,” he said. He added that every government should take steps in the larger national interests, instead of obliging a few for vested interests. The LTBA president was of the view that nations grow when tax is paid and the tax is used for the beneOits of the societies and not for the elite class’s extravagance which is a tradition in Pakistan.
APRIL 17 - APRIL 23, 2018
Customs Export recovers Rs11.22m from defaulter companies
KARACHI: The Customs Export has recovered evaded amount of taxes and duties of Rs 11.22 million from defaulter companies which were issued with notices to pay the outstanding dues. Sources told Customs Today that, during scrutiny of the import data, it was revealed that M/s Exclusive Curtain and Export availed undue benefits and concessions by importing printing and sewing machines by misusing the SRO 556 through Examiner Naseer Sharif on October 5, 2017.
Quetta Intelligence thwarts attempt to smuggle plastic powder into Afghanistan QUETTA
wAQAR AhmED AnsARI www.customstoday.com
he Directorate of Customs Intelligence and Investigation Quetta frustrated a smuggling bid of white and black (Crystal) plastic powder (Dana) and parts of moulding machines priced at Rs12.50million. Sources told Customs Today that Director Customs Intelligence and Investigation Quetta Muhammad Akram Chaudhary received secret information that some smugglers are trying to smuggle white and black (Crystal) plastic Dana and parts of moulding machines from Quetta into the neighboring country of Afghanistan. He constituted a raiding team under the supervision of Superintendent Kamran Taj and others. The team enhanced the surveillance on Quetta Highway Road and started the search of vehicles. The team intercepted a truck bearing registration No: GN-4536 which was going from Quetta to Afghanistan. During
the checking, the customs team recovered 250 bags of white and black plastic Danaand some
parts of moulding machines valued at Rs12.50million. The customs team impounded all
the sacks of plastic Dana and truck used in the smuggling and arrested three smugglers in-
Peshawar Customs arrests four accused car smugglers from Khyber Agency
cluding a driver. Sources said that an FIR will be lodged after 48 hours.
Attempt to smuggle Indian gutka, betel nut, artificial jewellery foiled KARACHI
CusToms ToDAY REPoRT www.customstoday.com
he Customs Anti-Smuggling Unit Peshawar has taken into possession a Non-Duty-Paid vehicle and apprehended four accused persons who were involved in the smuggling of NDP car from Khyber Agency into Punjab.
The Non-Duty-Paid (NDP) vehicle, bearing registration No: BC4387, was impounded when four accused smugglers named Adbur Rehman, Baghicha Gull, Baz Mohammad and Zahid Gull were trying to smuggle the said car into Pakistan by crossing the border. The arrested persons also offered the customs ofOicials bribe in return to release their vehicle. But the honest ofOicials re-
fused to accommodate their wrongdoing and arrested them on the spot. The Non-Duty-Paid (NDP) vehicle was taken into possession at Badabir area in Peshawar on Thursday when the Customs Anti-Smuggling Unit was performing its routine duty there. After an initial inquiry from the culprits, the accused people have been booked according to the Customs Act-1969.
he Directorate of Customs Intelligence and Investigation Quetta frustrated a smuggling bid of imported artificial Jewelry, Indian Gutka and betel nut priced at Rs4.23million. Sources told Customs Today that Director Customs Intelligence and Investigation Quetta Muhammad Akram Chaudhary received secret information that some smugglers are trying to smuggle artificial Jewelry, Indian Gutka and betel nut from Quetta into Hyderabad. He constituted a raiding team under the supervision of Superintendent Shahid Latif and others. The team enhanced the surveillance on Quetta Highway Road and started the search of vehicles.
APRIL 17 - APRIL 23, 2018
Customs Intelligence impounds smuggled seeds, electronic items
LAHORE: The Customs Investigation and Intelligence (I&I) has impounded containers carrying smuggled seeds and electronics goods worth millions of rupees from Shera Kot and Multan Road. Sources told Customs Today that Customs teams confiscated containers loaded with electronics goods and seeds from different places. The sources said that Kangni seeds were brought into the country under the Afghan Transit Trade while the electronics items were hidden in a hardware items carrier (truck).
RIMS to help make economy documented: Haroon Akhtar ISLAMABAD
muhAmmAD fAIZAn www.customstoday.com
Pakistan. RIMS is totally FBR own effort and no help has been seek from out sources. The system will help to make the economy documented. FBR is providing maximum facilities to the tax payers and in this regard the speedy work on reforms in process. Federal Board of revenue is creating deterrence for non-filers so that they compelled to include in the tax net. It is appreciable that RIMS has so far been successfully installed in 80 plus renowned restaurants operating in the federal capital and further implementation in remaining restaurants is in process. FBR, as a part of its ongoing strategy, is committed to rely more on use of modern techniques to bring about efOiciency and effectiveness in tax
collection. FBR is all set to work in close collaboration with Chambers and Restaurants Associations to ensure application of this system in all restaurants of Islamabad. Meanwhile, Special Assistant to Prime Minister on Revenue, Haroon Akhtar Khan has said the recent tax amnesty scheme is different from the schemes announced earlier and it will pave the way for rapid national development. While speaking at a pre-budget meeting at Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Haroon Akhtar Khan said that the scheme has been announced by keeping ground realities, economic problems, international laws and prevailing environment, therefore, criticism is unwarranted.
Chairman FBR Tariq Mehmood Pasha, President FPCCI Ghazanfar Bilour and representatives of dozens of trade association from all over the country were also present on the occasion. The minister said that if the recent scheme attracts Oive to ten billion dollars it will resolve a lot of the problems country is facing. He informed that the trade deOicit has emerged as the greatest challenge and all possible steps are being taken to tackle it. He said that we are changing tax culture which will make the country self-sufOicient if the business community feels safe. The minister said that the political instability has reOlected on the economy however the government is trying best to minimize its impact. The
— Exclusive Customs Today photos
he Federal Board of Revenue (FBR) has sought information from the Civil Aviation Authority, mobile phone companies, National Data base Registration Authority (NADRA) and commercial banks to bring tax evaders into the tax net, said Haroon Akhtar Khan, Special Assistant to the Prime Minister on Revenue. Addressing the participants at the launching ceremony of Restaurant Invoice Management System (RIMS) he said “the intelligence wing of the FBR has been strengthened as compared to the past and if one’s earnings do not match with expenditures, then one will have to answer to the FBR”. Haroon Akhtar said there is difference between hundi and money laundering, adding that the tax amnesty scheme was need of the country. He said that the FBR has launched Restaurant Invoice Management System (RIMS), a technological based solution, to monitor sales on real time basis, thus reducing the human interface and bringing transparency in the tax collection process. The prime objective of web-based RIMS is to facilitate the taxpayers by relying on modern techniques to tap the difference between current and potential collections. The ceremony was attended by Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan, Sheikh Amir Waheed Tariq, President ICCI and Khurram Khan, representative from restaurant association. On this occasion Special Assistant to Prime Minister Haroon Akhtar Khan has said that success of Federal Board of Revenue is success of
trade agreements have not increased exports but triggered imports which is unsustainable therefore all such deals in future will be thoroughly vetted and the input from the business community would be preferred, he said. Haroon Akhtar Khan informed that regulatory duties have been imposed on imports while currency has been devalued which has increased exports by 24 percent in the month of March while imports have been reduced to 6 percent from 26 percent. He informed that the incumbent government doubled revenue to Rs1946 billion while kept average inOlation at four percent. Tax to GDP ratio was increased by almost three percent while corporate tax was slashed by Oive percent which can be further reduced in case of tax net expansion.
fbR triples revenue collection despite cut in PsDP allocations D
muhAmmAD ARshAD www.customstoday.com
espite step motherly attitude allegedly of the Finance Division towards the Federal Board of Revenue (FBR), the tax collecting organ has tripled its revenue collection over the past decade. The Finance Division has been drastically reducing the funds for the Public Sector Development Programme (PSDP) of the FBR in last decade and this tendency should have marooned the its performance but the FBR demon-
strated the other way round. Sources told Customs Today that during the Oiscal year 2007-8 the total allocations for the PSDP of the FBR was Rs 2,526.774 million for 69 development projects while the total revenue collection was Rs 1.008 trillion. In the next Oiscal year 2008-09, the revenue collection was taken up to Rs 1.161 trillion while the PSDP allocations were lowered to Rs 2,370.716 million along with reduced number of development projects to 30 only. During Oiscal year 2009-10, the Finance Division slightly increased the allocations of PSDP to Rs 2,448.308 million for 68 develop-
ment projects and the FBR increased the Oigure of revenue collection to Rs 1.327 trillion. The sources said that FBR added some two trillion in the last year’s tune of revenue collection taking the Oigure of Rs 1.558 trillion in Oiscal year 2010-11 despite the almost 100% cut in the PSDP allocations; Rs 1234 million for 51 development projects. In the very next Oiscal year 2011-12, the number of development projects of the FBR were cut down to 38 with an increased amount of PSDP allocations to Rs 1970 million but FBR increased the tune of revenue collection to Rs
1.882 trillion. Finance Division cut the PSDP allocations to half of the previous Oiscal year in 2012-13 to Rs 806.768 million for 20 development projects; however, FBR took the revenue collection to Rs 1.946 trillion. The sources said that in the Oiscal year 2013-14, PSDP allocations were further reduced to Rs 533.346 million for 22 development projects but FBR added over three trillion rupees in the revenue collection; Rs 2.255 trillion. In the next Oiscal year 2014-15, Finance Division reduced the PSDP allocations for FBR to Rs152.495 million for 25 development projects, but FBR increased the rev-
Published by M S Raza Oﬀ# 42, 3rd Flr Gull Plaza M.A Jinnah Road Karachi, Printed by (Ibne Hassan Oﬀset Printing Press, Shops No. 33 to 36 , Hockey Stadium, Karachi).
enue collection to Rs 2.589 trillion. FBR increased some six trillion rupees in the revenue collection in the coming Oiscal year and took the Oigure to Rs3.115 trillion in Oiscal year 2015-16with PSDP allocations of Rs 353.091 million for 12 projects. Likewise in the Oiscal year 2016-17, FBR collected Rs 3.368 trillion with the allocation of PSDP of Rs 687.304 million for 09 development projects. The source concluded that for the current Oiscal year 2017-18, FBR was granted Rs 790.100 million for 10 development projects while FBR took the Oigure of revenue collection to Rs 4.013 trillion.