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Customs initiate audit of temporary imports.

The Customs authorities have initiated audit and scrutiny of all temporary imports as part of a drive against the misuse of concessionary regulatory orders, which resulted in significant revenue leakages at the import stage.

Customs Intelligence and Investigation (CII) has initiated audit of the import and export of business entities, which imported raw material for the purpose of value-addition and re-export it by availing of the benefits of SRO 492(I)/2009.

"We have found significant revenue loss, as most of these goods imported duty-free under SRO 492(I)/2009 were never exported back and sold in the local market instead," an official said.

The SRO provides exemption from the payment of duty and taxes on temporary imports. However, in terms of sub clause (iv) of the said SRO, the importer is statutorily bound to export such temporarily imported goods after due process within a period of 18 months of its importation.

Moreover, on the request of importer, this 18-month period is extendable by the Collector of Customs for further six months on payment of one percent surcharge/month on CandF value of goods for which extension is sought.

Failure in exporting the equivalent quantity makes the importer liable to pay statutory rate of duty and taxes.

The official said the authorities had already detected one such importer and lodged FIR for the recovery of around Rs8 million.

"This is one such case, we have started audit and scrutiny of all temporary imports and a large number of disparities have been identified," the official said.

Similarly, concessions under various other concessionary orders, including SRO 1125, SRO 678, SRO 575, SRO 565, SRO 477 and SRO 567 are claimed despite the fact that the required conditions are not fulfilled.

The culture of the SROs has over time deeply entrenched itself in the country's tax administration because of the excessive misuse of legislative powers delegated to the tax authorities.

The FBR also had statutory powers to give unlimited tax concessions, waivers and exemptions without parliamentary approval.

It was with a view to putting an end to the misuse of SROs that the International Monetary Fund (IMF) had made the government agree to withdraw tax exemptions.

As per the understanding with the IMF, the government is taking measures to end concessionary regulatory orders. In the first phase, the powers of the FBR for issuing special tax concessions / exemptions for pleasing lobbies have been abolished, and handed over to the elected House.

Besides, in the last federal budget, a large number of exemptions and concessions were withdrawn.

Moreover, the FBR has advised all formations, including Customs and Inland Revenue to eliminate misuse of the concessions.

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Publication:Enterprise (Asianet-Pakistan)
Date:Apr 30, 2016
Words:501
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