ByKarachi, Pakistan: In a major crackdown, the Post Clearance Audit (PCA) South has uncovered a massive tax evasion scheme involving a prominent cement manufacturer. The company is accused of misusing four export tax exemption regimes, including Manufacturing Bond, DTRE (Duty & Tax Remission for Export), Temporary Import (TI) under SRO 492, and the Export Facilitation Scheme (EFS), resulting in a staggering Rs. 2.4 billion in revenue loss to the national exchequer.
The investigation revealed that the manufacturer imported large quantities of clinker and packing materials under these tax exemption schemes but failed to fulfill the corresponding export obligations. A physical inspection of the factory premises found a significant discrepancy between the declared inventory and the actual stock, indicating that a substantial portion of the imported goods was diverted to the domestic market.
Multiple Layers of Deceit:
The investigation uncovered multiple layers of deceit. The manufacturer falsely claimed that a portion of the clinker was stockpiled at Taftan and Gwadar dry ports, a claim that was later found to be unsubstantiated. Furthermore, the company continued to import goods under these exemption schemes even after the utilization periods had expired.
Financial Losses and Surcharges:
The PCA calculated the total tax evasion at Rs. 2.4 billion, comprising Rs. 369 million through Manufacturing Bond, Rs. 222 million via DTRE, Rs. 91 million under Temporary Import, and a colossal Rs. 1 billion through EFS misuse. Additionally, a surcharge of Rs. 676 million was imposed for the illegal removal and sale of exempt goods.
Legal Action:
The PCA South has lodged a First Information Report (FIR) against the manufacturer under Section 32A of the Customs Act. A thorough investigation is underway to identify and apprehend all individuals involved in this complex scam.
Wider Implications:
This case highlights a serious concern regarding the misuse of export facilitation schemes by unscrupulous traders. The PCA has vowed to continue its efforts to combat such illegal activities and ensure that all businesses operate within the framework of tax laws.
