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PAKISTAN’S FIRST INDEPTH NEWSPAPER ON CUSTOMS

Daily

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Karachi, Fri October 27, 2017

PESHAWAR

TARIQ DERYA

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he Anti-Smuggling Organization Peshawar generated Rs50.32million revenue during 2nd week of October Financial Year 201718 by taking into possession 14 offending, one Non-Duty-Paid vehicles and other various kinds of smuggling goods.

According to details ex-

plained by Gul Rehman, Collector Model Customs Collectorate (MCC) Peshawar, that the performance of the Anti-Smuggling Organization (ASO) has been brilliant during 12th to 18th of October FY2017-18. During above said period, the ASO Peshawar took into possession 14 offending vehicles (Vehicles used for carrying smuggling goods) worth Rs25.10million while it did one NonDuty-Paid (NDP) vehicle valued at Rs3.5million.

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And the ASO seized different smuggling goods priced at Rs21.72million and lodged cases against notorious smugglers.

The ASO Peshawar impounded various smuggling items and offending vehicles worth Rs45.4million during Lirst week of October Financial Year 2017-18. During Lirst week, the ASO Peshawar took into possession one NonDuty-Paid vehicle valued at Rs4.00million whereas it did 13 offending vehicles valued at Rs14.1million.

ASO Peshawar earns Rs50.32m by impounding 14 offending vehicles

Customs seize juicers, blenders & crockery worth Rs1.2 million

Customs Preventive seizes NDP auto parts, cloth, chemicals from Babu Sabu

HK Customs seizes suspected worked ivory and rhino horns

PCA detects tax evasion of Rs 4.56m by M/s SG Enterprises

ASO Peshawar generated Rs50.32million revenue during 2nd week of October | SEE PAGE 01 |

Customs I&I has thwarted the attempt of smugglingNDPjuicers,blendersandcrockery | SEE PAGE 02 |

ASOimpoundedillegallyimportedautoparts, cloth, chemicals worth millions of rupees | SEE PAGE 05 |

HK Customs seized about 43 kilograms of suspected worked ivory | SEE PAGE 07 |

’PCA has detected DT evasion of Rs 4.56m allegedly by M/s SG Enterprises | SEE PAGE 08 |

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Food exports increase 17.52 percent in first quarter Friday, October 27, 2017

National

ISLAMABAD: Food group exports from the country during first quarter of current financial year increased by 17.52 percent as compared the exports of the corresponding period of last year.

Food Commodities worth US$ 742.391 million were exported during the period from July-September, 2017-18 as compared the exports US$ 631.731 million of same period of last year, according the latest data released by the Pakistan Bureau of Statistics.

Customs seize juicers, blenders & crockery worth Rs1.2 million

FAISALABAD

MULTAN

NAEEM SHEIKH

IMRAN ALI

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he Customs Collectorate Deputy Collector headquarters Muhammad Rizwan has constituted a special teams in order to streamline the audit of licensed under SRO450(I)/2001 and export oriented unit (EOUs) licensed under SRO-327(I)2008 and other audit assignments given by the Collector Muhammad Sadiq.

Sources told Customs Today, that team constituted under the under the supervision of Collector Muhammad Sadiq to take strict action against tax defaulters.

It is pertinent to mention here that Deputy Collector Muhammad Rizwan has directed the field staff to keep eyes on tax defaulters and guide them about tax system for enhanced monitoring and quick disposal of audit work an audit cell. The audit team comprising officials including Inspector Asif Hussain, Ayesha Mehmood Appraiser conducted audit of M/s Nishat Mills Limited, Appraiser Imdad Ali, Inspector Khalid Ashraf Noor M/s M.K Sons, Tanveer Hussain, Muhammad Yousaf inspector M/S Niagara Mills, Hafiza Arslan Shaguffta Appraiser, Inspector Muhammad Afzal Awan M/s J.K Spinning Mills, Ghulam Murataza Anjum, Muhammad Afzal Naeem inspector M/s Arshad Corporation.

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irectorate of Customs Intelligence and Investigations has thwarted the attempt of smuggling non duty paid juicers, blenders and crockery in their action worth Rs.1.2 million.

Sources told Customs Today that Deputy Director Customs Intelligence and Investigation Multan Khial Muhammad Khan received a tip off that smugglers are trying to smuggle electronic goods through Sadiqabad region. Deputy Director formed special team immediately to foil their attempt of smuggling by enhancing the patrolling of Customs staff at the Highway and other suspected routes.

The entrance and exit of Sadiqabad was strictly monitored and suspicious goods were thoroughly examined to intercept the smuggled goods.

Customs Intelligence teams found few goods loaded on the goods company and it was coming in the Rahim Yar Khan.

During the examination of the Customs Field Intelligence Unit found that foreign origin branded electronic goods were packed in the cartons and these cartons were lying in the truck and Customs team asked the driver to produce the original import documents of the said goods to prove

Deputy Collector Rizwan constitutes special team for audit

its possession.

They provided bilty and failed to prove any import documents of the said goods .Customs Intelligence teams took the 121 cartons

of the branded electronic items which includes foreign Origin Juicers, Blenders and crockery.

Customs Intelligence and Investigation team seized the foreign

origin goods of worth Rs.1.2 million and duty taxes of Rs800,000 by forming seizure report. Further Investigation are still underway till the filing of this report.

Customs asks KP Excise for handover of 250 impounded vehicles

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PESHAWAR

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he Customs Department of the Federal Board of Revenue has demanded the possession of 250 NDP vehicles impounded by the Excise and Taxation Department of Khyber Pakhtunkhwa Government.

The sources said Collector Customs at Customs House Peshawar Gul Rahman has ordered the formation of a high level delegation for

taking the Lleet of vehicles.

Earlier, the Peshawar Customs and Excise Department held several meetings regarding the handover of NDP vehicles to the Customs Department. But, due to unknown reasons, the meetings failed to yield positive results for the Peshawar Customs. Earlier, the Customs Department had won a case against the Khyber Pakhtunkhwa Police in Peshawar High Court after which 25 NDP vehicles had been handed over to the Customs Department. These

NDP vehicles were taken into possession by the Police Department by conducting different raids inside the KP. The Peshawar High Court had

also directed the Excise Department to hand over these vehicles to the Customs Department but, due to slow procedure adopted by the Excise Department, the NDP vehicles have not been delivered to Peshawar Customs for which FBR has decided to take the case forward in order to get the possession of these vehicles.

The power to impound NDP vehicles rests in the Customs laws and the primary duty of the Customs Department to investigate the NDP vehicles has been taken by other de-

partments in order to eliminate the use of NDP vehicles in KP province.

The customs ofLicial at the Customs House further informed Customs Today on Monday that the FBR has got documents of vehicles which are in possession of the Excise Department. The Peshawar High Court has also given its verdict to deliver the NDP vehicles to Peshawar Customs.

But the Excise Department is not willing to transfer the possession of the NDP vehicles to the Customs Department, he maintained.

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LAHORE M HAYAT www.customsbulletin.com ustoms Preventive Anti-Smuggling Organization (ASO) on Tuesday impounded illegally imported auto parts, cloth, chemicals worth millions of rupees from Babu Sabu Interchange.

OfLicial sources told Customs Today that on the information of Collector of Customs Preventive Faiz Ahmad , the ASO Lahore team number-3 intercepted a bus bearing registration no: LES/ 167987 of Niazi Bus Service on Daweoo Bus Stand and recovered 780 units of HD digital receiver, 200 units of auto-parts, 1,500 yards of foreign made cloth and 80 kilogram of chemicals.

The ASO team that undertook the operation consisted of ASO Superintendent Nasir Minhas, Deputy Superintendent Agha Qadeer, inspectors Mansoor Elahi, Muhammad Aslam Chaudhray and Azam Wattoo.

It was said that the smuggled goods were estimated at Rs 3 million and the operation was led

by Deputy Collector of Customs Moazzam Raza.

Sources told The Business that Lahore collector of

Friday, October 27, 2017

customs Faiz Ahmad has instructed all the ASO team to adopt zero tolerance against the smuggling activities in the city.

The sources said that the smuggled goods were hidden under the seats and in the special made areas of the bus by three accused Bilal Noor Muhammad and Jamil residents of Peshawar.

It was said that the accused were not arrested as the goods and articles do not come under the head of 2(s) items under the Customs Act. Earlier, the ASO team conLiscated four trucks of smuggled tomatoes during the acute shortage of the vegetables a few days before and the tomatoes were auctioned for Rs3.8 million. Meanwhile, Collectorate of Customs Preventive Anti-Smuggling Organization has seized 100 bus tyres millions of rupees from Mazda which was coming from Rawalpindi.

OfLicial sources told Customs Today that on information of Collector of Customs Faiz Ahmad, the Customs ASO team constituted a team consisting of Superintendent Nasir Minhas, Inspector Amjad

Khan, Azam and others. The team intercepted a bus loaded with illegally imported tyres near Batti Chowk and seized the tyres after the owners of the bus failed to produce any legal import and clearance documents to the customs authorities.

The sources said that the team that conLiscated the tyres worth millions of rupees which was led by the Deputy Collector Moazzam Raza. The authorities after registering the case have started investigation into the matter.

It was reported that the ASO has intensiLied operations against the smuggling activities on the directions of the collector customs Preventive.

epted interc 3 r e numb S/ 16no: LE e team n r o o i h t a a r ASO L aweoo regist aring e on D c e i b v r s e u sS ts of ab 80 uni iazi Bu 7 N d f e o r 7987 autorecove d and nits of n u a 0 t 0 S 2 r, cloth Bus eceive made r l n a g i t i e of for HD dig yards micals 0 0 5 , 1 of che , s m t r a r a p kilog and 80

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Founder & Chairman Zulfiqar Ali Editor Rahil Yasin editor@customsbulletin.com.pk For advertising & subscription marketing@customsbulletin.com.pk www.customsbulletin.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore

EDITORIAL

Another short-term loan

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According to newspaper reports, the government has obtained a short-term loan of $450million from a consortium of local and foreign banks to arrest the sliding foreign currency reserves which have depleted by $4.4 billion in one year.

However, it is yet to ascertain the interest rate which the government will pay on the short-term facility. Reports suggest that the loan agreement is the third of its kind which Pakistan has signed with Credit Suisse during the last five months, showing a bitter fact that the government’s dependence on foreign financing is growing. Earlier, the government had signed two loan agreements of $650 million with the same agency. With the third loan agreement, the volume of Pakistan’s total commercial loans has increased to $703 million not in three years but in three months. The chief of army staff has already expressed concern over the burden of sky-high debts on the nation and it is yet to be seen to which way the government policymakers are leading the country. The move also puts a question mark on the ability of the government to achieve financial stability.

The regular channels of inflow of money from abroad are drying up and probably the government has only one choice and that is to get fresh loans. The independent economists and financial experts have also expressed concern over the growing vulnerabilities of the country’s economy.With injection of $450 million fresh loan, foreign exchange reserves of the State Bank of Pakistan have increased to $14.158 billion. This is the level of financial management which has been pushing the country to the point of no return. The exports have been falling and remittances sent by Pakistani expatriates are also dwindling, putting burden on the foreign currency reserves, which considerably dropped during the last one year.The dirty international politics is pushing the country toward another war on terror and security challenges are growing with increasing incidents of terrorism across the country. The accumulation of foreign commercial loans has also increased the external debt servicing during the last three years.

GSP plus status and exports I

LAHORE

DR AFTAB AFZAL

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n 2013, the grant of Generalised System of Preferences (GSP) Plus status to Pakistan by the European Union was seen as the big achievement of Nawaz Sharif after he assumed powers as the prime minister. However, the country could not avail full benefits of the duty free access and the scheme is reportedly ending this year. At the time, 406 members of the European Parliament had supported Pakistan, allowing 20 percent of Pakistani exports to enter the EU market at zero tariff and 70 percent at preferential rates. No doubt the Pakistani exporters had achieved

laurels in the world trade in the past and the award of the GSP Plus status was a show of confidence of the international community in the standard and quality of the Pakistani products.

However, four years later, the move apparently ended in fiasco.

Now it is time for the government to determine the causes of its failure as to why the business community had not been able to take full benefits of the scheme.

The fate of other bilateral trade agreements between Pakistan and the European Union also hangs in balance.

According to the advice of the selected experts, which met the other day, a joint effort by all the stakeholders is required to as-

certain and resolve the problems being faced by the exporters. There is a need to start concerted efforts to determine key factors which are required to push up growth and avail the benefits of Small and Medium Enterprises to create export surplus. The first problem faced by the exporters is their inability to diversify their products and keep up international standards by using modern techniques and machines. The shortage of electricity is still haunting the industry and there is a lack of coordination between the official machinery and the business community. Mistrust between the two sides prevails and no effort has been made to fill the

gap. The business community complains the government is in no a mood to consult them during the formulation of relevant policies. Alleged corruption in the taxation system is no more a secret and revision of tax laws is need of the hour.

The businessmen want early release of duty drawback claims and effective policy initiatives to increase the export volume. The prime minister is currently on a visit to attend the moot of D-8 Organization for Economic Cooperation in Turkey. It is hoped the ofLicials will also discuss the issue of the renewal of the GSP status after he returns to the country and would take effective measures to get beneLit from the scheme.

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Finance ministry, SIGAR seize 45kg of ‘illegal’ gold Friday October 27, 2017

World

KABUL: The minister of finance says the smuggling of gold is an ongoing problem and measures will be taken to fight the issue.

The Ministry of Finance with the help of the Special Inspector General for Afghanistan Reconstruction (SIGAR) has seized 45kgs of gold that was due to be smuggled out of the country, the Finance Minister Eklil Hakimi said. Hakimi said the gold was worth at least $2 million USD. However, he did not give more details about it during a press conference. According to him, the gold has been handed over to the stateowned Central Bank for safe-keeping and based on an agreement signed at the Senior Officials Meeting in Kabul last week.

HK Customs seizes suspected worked ivory and rhino horns

Singapore’s Sea poised to raise US$850m in IPO SINGAPORE

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HONG KONG

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ong Kong Customs today seized about 43 kilograms of suspected worked ivory and about 2 kilograms of suspected rhino horns with an estimated market value of $1.3 million at the Hong Kong International Airport.

Customs ofLicers intercepted three female passengers, who arrived from Harare of Zimbabwe via Dubai of the United Arab Emirates this afternoon. During Customs clearance, about 43 kg of suspected worked ivory wrapping with plastic tape was found in the carry-on baggage of two of the passengers. Upon further examination, about 2 kilograms of suspected rhino horns wrapping with plastic tape were found bundling at the abdomen and thighs of the third passenger. The trio, aged from 20 to 34, was then

Qualcomm faces $774m antitrust fine in Taiwan ualcomm’s antitrust troubles aren’t going away any time soon. Taiwan’s Fair Trade Commission has fined the company the equivalent of $774 million over claims it abused its dominance of cellular chipsets in phones. The company effectively has a monopoly over CDMA, WCDMA (3G) and LTE chipsets, the Commission said, and it refuses to properly license its technology to others. Accordingly, the penalty will also have Qualcomm submit twice-a-year reports on negotiations with other companies. Qualcomm, not surprisingly, disagrees with the decision. It plans to call for a stay on “any required behavioral measures” and will appeal the FTC’s action in Taiwanese courts.

The fine has “no rational relationship” to Qualcomm’s actual revenues in Taiwan, the company said. –CB Report

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arrested. The case has been handed over to the Agriculture, Fisheries and Conservation Department for follow-up investigation. Under the Protection of Endangered Species of Animals and Plants Ordinance, any person found guilty of importing or exporting an endangered species without a licence is liable to a maximum Line of $5 million and imprisonment for two years.

Meanwhile, Hong Kong customs

ofLicers arrested 331 suspects in a crackdown against cross-border smuggling during the National Day “Golden Week” holiday period. The 282 men and 49 women, aged from 18 to 84, were rounded up as customs ofLicers stepped up enforcement actions at various land boundaries and railway and ferry control points during the 10-day operation from according to the Customs and Excise Department.

France dials back on digital tax plans after US meetings

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rench Economy Minister Bruno Le Maire was gung-ho about taxing digital giants like Google and Amazon on the billions of euros they generate, collectively, each year in Europe.

Then he went to Washington. After three days in the U.S. capital, including a face-to-face meeting with U.S. Treasury Secretary Steven Mnuchin and calls with tech industry lobbyists, Le Maire

and other European officials quickly changed their tune, offering a more subdued take on how Silicon Valley tech companies should pay into national coffers.

Gone was the rabble-rousing language of taxing tech companies on their revenues rather than profits.

Instead, the idea morphed into just one of many options that will be discussed by European leaders at a summit in Brussels. –CB Report

ingapore’s Sea Ltd. plans to price shares at $15 in its initial public offering and raise more than $850 million, according to people familiar with the matter.

The total amount may be more than $1 billion if an option to sell additional shares is exercised, said one of the people, asking not to be identiLied because the matter is private.

The games company, backed by China’s Tencent Holdings Ltd., raised the price from its initial range of $12 to $14 for each share. It also increased the number of shares to be sold. Sea is often called the Tencent of Southeast Asia and has beneLited from the Chinese company’s support.

Sea licenses games from Tencent, which also holds a stake of about 40 percent in the smaller company. Investors are scooping up Sea’s shares

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despite rising losses at the company as it diversiLies into e-commerce and payments. Sea had a net loss of $165.2 million in the Lirst half of the year on revenue of $195.5 million.

It’s nevertheless one of the most valuable startups in Southeast Asia. It was valued at $3.75 billion in its 2016 fundraising and will surpass $4 billion with the IPO. “Sea is a futurelooking investment,” Kai-Fu Lee, founder of Beijing-based Sinovation Ventures, said before the offering.

“Investors are betting that it can become the 800-pound gorilla that will make all the money it may have lost.”

Sea was founded by Forrest Li as an online gaming company in 2009 and originally named Garena. He rebranded the company to reLlect its regional ambition and diversiLication.

Sea branched out with a digital payments service called AirPay in 2014 and the mobile shopping business Shopee in 2015. Sea’s games business, which retained the Garena name, still accounts for more than 90 percent of total revenue.

Malaysian exports to hit Rm700m alaysia’s exports of fruit are expected to surpass last year’s Rm600m (US$142.2m) and reach Rm700m (US$165.9m), according to the Federal Agricultural Marketing Authority (Fama). Leading the way is durian exports, which Fama chairman Tan Sri Badruddin Amiruldin said would more than double to Rm150m during 2017 compared to last year. “We expect more durian orchards to produce high-quality fruits, (following which) we will export to more foreign countries such as China, Hong Kong, Australia, and others,” he told the Malay Mail.

Malaysia has access to China and Australia for frozen durian and durian pulp, but exporters are hoping to gain access for fresh durian in coming seasons. Malaysian’s durian shipments were valued at Rm18.02m last year, with Badruddin expecting exports to increase to Rm23.4m. Around 5,000 tonnes of frozen Musang King durian will be shipping to Guangxi, China, for the Nanning Durian Festival running from 3-5 November. Meanwhile, Malaysia’s palm oil stocks rose for a third month in September to breach the 2-million-tonne mark for the Lirst time in well over a year. –CB Report

BPC to sign diesel purchase deal with Indian refinery

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DHAKA

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tate-owned Bangladesh Petroleum Corporation (BPC) is set to sign a 15-year sales and purchase agreement with Indian oil company Numaligarh ReLinery Ltd (NRL) for importing diesel to meet local demand. “We hope that the

agreement will be signed during Indian Foreign Minister Sushma Swaraj’s upcoming Dhaka visit,” BPC Director (Operations and Planning) Sayed Mohammad Mozammel Haque told the Dhaka Tribune on Thursday. “Diesel will be imported through a cross-border pipeline from the Indian oil reLinery, located at Golaghat in the north-eastern state of Assam. Bangladesh will receive the

oil at Parbatipur petroleum depot in north-western district of Dinajpur.”

Mozammel conLirmed that the BPC would import 250,000-300,000 tons of diesel each year, following the construction of a 130km cross-border Indo-Bangla Friendship Pipeline. India will construct the pipeline, of which 125-km will be located in Bangladesh. The BPC ofLicial is optimistic that the pipeline will be built

within the next two years. Managing Director of NRL, a subsidiary of India’s state-run Bharat Petroleum Corporation Ltd, P Padmanabhan and BPC Director Mozammel will sign the agreement on behalf of their respective countries in Dhaka. The BPC will pay NRL a premium of $5.50 per barrel while the diesel price will be Lixed according to the rate in the international market.

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Customs I&I release milk tank after verification of documents MULTAN: Directorate of Customs Intelligence and Investigation released the detain milk tank after its verification. According to details, Customs Intelligence and Investigation staff has taken the private diary farm milk tank into their custody on suspicious documents. Customs teams asked the driver to produce original import documents and detained the milk tank. Milk tank was used for commercial purpose and its owner Malik Murad was using it for the transportation of milk to their clients in Multan from Kabirwala.

Friday, October 27, 2017

CUSTOMS BULLETIN

Customs’ PCA detects tax evasion of Rs 4.56 million by M/s SG Enterprises KARACHI WAQAR AHMED ANSARI www.customsbulletin.com

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irectorate of Customs’ Post Clearance Audit has detected duties and tax evasion of Rs 4.56 million allegedly

by M/s SG Enterprises, it is learnt.

The ofLicial sources told Customs Today that M/s SG enterprises imported four consignments of heavy duty generator parts and others machinery parts under PCT Heading 5406.2409 and cleared PICT Karachi vide GDs No LM-63589 on January 16, 2016, by paying customs duty at 13 percent after claiming beneLit of SRO 689/2007.

However, the subject goods are correctly classifiable under PCT 5607.2584 attracting customs duty at 20 percent and income tax at 10 percent. Thus, by way of mis-declaration of classification, M/s S G enterprises evaded/short paid Rs 4.56 million. Therefore, the importer, has violated the provisions of Section 34 (1) (2) & (3A) of the Customs Act, 1969, Section 2, 4 & 9 read with Section 42 of the Sales Tax Act 1990 and Section 146 of Income Tax Ordinance 2001 punishable under clauses (1), and 19 of Section 158(1) of the Customs Act

1969, Section 39(5) of the Sales Tax Act 1990 and Section 154 & 162 of Income Tax Ordinance 2001 and section 7A of the Sales Tax Act 1990 read with chapter X of the Sales Tax Special Procedure Rules

2007 (special procedures for payment of sales tax by the importers) and under relevant provisions of Income Tax Ordinance 2001. Accordingly, an audit observation was issued to M/s S G Enterprises for

explaining and clarifying as to on what basis they have avoided/ evaded the livable duty and taxes.

The importer, however, failed to come up with any tangible evidence and explanation and was also un-

able to refute the charges leveled by the department. Earlier Directorate of Customs Post Clearance Audit has detected duties and tax evasion of Rs 2.28 million allegedly

by M/s Hakeem Ali Associates.

Cellular companies paid over Rs42.5b income tax in five years ISLAMABAD

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ive cellular companies operating in the country, including Zong, Ufone, Mobilink, Telenor and Warid Telecom, have paid total income tax of over Rs 42.549 billion during the last Live Liscal years (2012-13 to 2016-17), ofLicial data reveals. The companies paid income tax of Rs 6,419.3 million in

2012-13, Rs 10,358.3 million in 2013-14, Rs 8,286.9 million in 2014-15, Rs 8,149.5 in 2015-16 and Rs 9,335.3 in 2016-17.

According to the data, the highest amount of tax was collected by the government during the year 2013-14, followed by 2016-17, 2014-15, 2015-16 and 2012-13.

Regarding the audit of the cellular companies, ofLicials sources said their audit was conducted under three tax statues i.e. Income Tax Ordinance, 2010, Sales Tax Act, 1990 and Federal Excise Act, 2005.

The audit commences after the case is selected for audit under

Section 177/214C of the Income Tax ordinance, 2001, Section 72B/25 of the Sales Tax, Act, 1990 and Section 46/42B of FED Act, 2005. Selection is done by

both the Income Tax Commissioner concerned and Federal Board of Revenue as per Audit Manual that prescribes a pre-audit conference with the taxpayer

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in which scope of audit and time line to complete the audit is decided. Consequently “Information Document Request” (IDRs) is issued for seeking relevant records and information. After obtaining books of accounts and documents provided by the taxpayer an audit report is prepared and if required a post audit conference is again conducted with the taxpayer to apprise the legal and factual discrepancies. Thereafter, legal notice to amend the assessment order / return of the taxpayer is issued to provide lawful opportunity of being heard.