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pAkISTAN’S fIRST INdEpTH NEwSpApER ON CuSTOMS

Vol 2 Issue No. 19

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karachi, Tue May 27 - Mon June 02, 2014

Regd. No, MC-1381

pRESENTINg NEXT budgET

Budget 2014-15 is to be presented on June 3 in National Assembly with total outlay of Rs3,973 billion and expected budget deficit of 4.8 per cent of the GDP for next fiscal year, says Dar. | SEE pAgE 02 | ENACTINg SHIppINg bILL

LAHORE

M HAYAT

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he Collectorate of Appeals is of prime importance in the entire apparatus of Customs due to its independent status and intermediate role. The parties including the customs department approach the collectorate whenever they are unhappy with judgments at lower level by Customs ofQicials.

This was the crux of an exclusive talk of Customs Collector (Appeals) Asif Mahmood Jah with Customs Today at his ofQice in Customs House,

The govt would soon put the Shipping Bill before the National Assembly for approval to modernise the ports and shipping sector, says Kamran Michael. | SEE pAgE 02 | AdOpTINg TECHNOLOgY

Chief Collector Nasir Masroor and Collector Muhammad Saleem visited KICT to inspect the performance of examiners after provision of iPads and tablets. | SEE pAgE 06 | CARTOONS SpECIAL

| SEE pAgE 11 |

— Exclusive Customs Today photo

TAXE S

Lahore. He informed that importers as well as Customs ofQicials knock the door of the collectorate against the judgment declared by the Collectorate of Adjudication on cases instituted by the Deputy Collectors, Superintendents and Appraisers within 40 days.

“Normally cases are decided within one month but it also depends on when the (aggrieved) party Qiles an appeal with the collectorate,” he pointed out, adding that every case is decided after a thorough hearing of the parties involved. Jah said that the Collectorate (Appeals) had been functioning for many years and was taking up cases instituted by all collectorates including Preventive, Appraisement and Directorate of Intelligence and Investigation of Lahore and other cities including Multan, Faisalabad and Sialkot.

“Four to Qive cases are heard on a daily basis. The collectorate is an appellate forum which has quasi-judicial powers and can hear and decide cases involving up to Rs1 million, while cases decided by the Collector Adjudication and Additional Collector Adjudication can be challenged at Customs Appellate Tribunal,” the Collector Appeals explained.

According to the collectorate, 131 cases, involving millions of rupees revenues have been disposed of during the Qirst three months of the current year. The collectorate decided 44 cases in favour of taxpayers while 87 cases were decided in favour of the department.

The collectorate is an appellate forum which has quasi-judicial powers and can hear and decide cases involving up to Rs1 million

Price Rs. 50.00

02

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NATIONAL

MAy 27 - JuNE 02, 2014

Abdul Rasheed appointed as Chairman pakistan Shippers Council

KARACHI: Federation of Pakistan Chamber of Commerce and Industry President Zakaria Usman has appointed Abdul Rasheed Jan Mohammad as Chairman of Pakistan Shippers Council for the year 2014. Abdul Rasheed Jan Mohammad is a renowned businessman and the Chief Executive Officer of Mapak Edible Oils (Private) Limited.

Shipping Bill to be enacted soon: Kamran Michael KARACHI

govt feats enumerated: dar highlights glimpses of next annual budget

CuSTOMS TOdAY REpORT ederal Minister for Ports and Shipping Kamran Michael has said that the government would soon put the Shipping Bill before the National Assembly for approval to modernise the ports and shipping sector.

He said this during a meeting organised by the All Pakistan Shipping Association (APSA).

Michael informed that the Shipping Bill had been lying with the ministry for the last seven years.“It is unfortunate that a vital sector like shipping, which has direct links and dealing with outside world, is still being run by 150 years old law – Carriage of Goods by Sea Act 1882,” the minister regretted.

Michael assured the members of All Pakistan Shipping Association that his ministry would go through the Shipping Bill and after making necessary changes will get federal cabinet’s approval and then put the bill before the parliament to make it an Act. He further said that the new Shipping Act would be in line with modern shipping practices which are at par with global standards.The shippers association’s Chairman Captain Mushtaq Ali Shah said that in the absence of proper shipping law, practices were becoming the rules of the trade and this was causing an increase in litigations. Michael encouraged the association to forward its proposals for upcoming Shipping Bill so that logistics were developed to meet the shipping sector demands as well as modern requirements.

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Anti-smuggling wing seizes bus, 36000 non-duty paid irons ustoms anti-smuggling unit has confiscated a bus full of smuggled goods and articles at a bus stand.

36,000 non-duty paid irons in particular were found among other smuggled articles.

The anti-smuggling scout under surveillance of Inspector Khalid Butt raided at the Niazi bus stand impounding the bus abound with various non-duty paid items including 60 packs of DVD-ROMs, 30 packs of Honda car shock absorbers,TVs, tapes, 44 engines and other miscellaneous goods and items worth 1 million rupees.

Sources said that the non-duty paid goods were being meant for dumping into the local market of Lahore all the way from Peshawar when the customs antismuggling wing seized the bus.

Sources said that Muhammad Anwar and Sajjad Ali were identified as the owners of the impounded bus.They have failed to produce any document against the goods seized by the customs antismuggling department. —CT Report

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ISLAMABAD

CuSTOMS TOdAY REpORT www.customstoday.com

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inance Minister Senator Ishaq Dar has said that the government will announce the annual budget 201415 on June 3 in National Assembly with total outlay of Rs3,973 billion and budget deQicit of 4.8 per cent of the GDP for next Qiscal year.

Finance Minister Ishaq Dar briefed the joint session of the National Assembly and Senate’s Standing Committee on Finance, Revenue and Economic Affairs on the upcoming budget. The committee’s proceedings were declared in-camera on request of Finance Minister. The Finance Minister spent most of the time briefing on current economic situation of the country instead of budget proposals. He recalled the economic achievements of the government during first year of its tenure including elimination of circular debt, IMF programme, auction of 3G/4G, auction of Eurobonds and others.

Participants of the meeting informed that the Finance Ministry had briefed the committee on the main contours of the budget 2014-15 in the joint parliamentary committee. However, the government’s economic team did not disclose the taxation measures in the meeting.

The committee was informed that the total volume of the upcoming budget is estimated at Rs3,974 billion with fiscal deficit at 4.8 per cent of the GDP (approximately Rs 1630 billion). The government would allocate Rs700 billion for the defence budget; Rs 525 billion for public sector development programme (PSDP); and Rs1,347 billion for debt servicing. Meanwhile the government has decided to keep revenue collection target at Rs2,810 billion for next fiscal year. The non-tax revenue for the next budget has been projected at Rs817 billion. The government has estimated subsidies at 229 billion, Rs215 billion for paying pensions to retired employees and Rs285 billion

— Exclusive Customs Today photo

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for federal government service delivery.

Inflation rate is projected at eight per cent and GDP growth at five per cent.

Finance Minister would announce the budget on June 3 2014, as President of Islamic Republic of Pakistan has summoned the session of the National Assembly on the same day. Sources said that government is considering increase in salaries and pensions by 10 per cent in the next budget.

Lawmakers of opposition parties showed dissatisfaction over the budgetary measures of the government by saying that these would result in rapid increase in inflation rate. They showed serious concerns over the government’s proposed revenue collection target of Rs2,810 billion and doubted that FBR might struggle to achieve it. They were of the view that government should call the standing committees three months before the budget to incorporate the proposals of the lawmakers.

Ishaq Dar assured the parliamentary committee that government would release the developmental funds under Prime Minister’s discretionary funds under People’s Works Programme-II (PWPII) after the judgment of Supreme Court of

The total volume of the upcoming budget is estimated at Rs3974b with fiscal deficit at 4.8 percent of the gdp

Pakistan.

“Finance Minister has assured the committee to release the funds of Rs10 million for each parliamentarian under PWP-II after the Supreme Court judgment”, said Senator Muhammad Talha Mahmood of JUI-F. He added that government would release the funds of the outgoing fiscal year in next year, as it did not release single penny for the lawmakers for development works in their constituencies. Member National Assembly Naveed Qamar also opted same stance and said that they had asked the Finance Minister to release the funds for developmental projects of the country. He termed the revenue collection target Rs2,810 billion set for next financial year as ‘notional’.

Former Finance Minister Senator Saleem Mandivalla termed the budgetary targets as ambitious and budget strategy paper as ‘wish-list’. Senator Talha informed the media that government’s measures would increase the inflation rate in the country. He expressed doubts over the tax collection target of Rs2,810 billion. He objected that government has not kept single penny for Dasu hydroelectric project in the budget.

Rs450m vehicle amnesty scam: Audit of Customs officials' accounts suggested KARACHI

CuSTOMS TOdAY REpORT www.customstoday.com

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he 3-member fact-Qinding committee comprising MCC Exports Collector Dr Wasif Memon, Additional Director of Directorate of Intelligence and Investigation-Customs Karachi Khalil Yousufani and Additional Director Audit in its report has recommended a complete audit of bank accounts of all customs ofQicials including ofQicers deployed in Vehicle Group (Group-VII) during the period of Vehicle Amnesty Scheme.

According to sources in FBR, the

fact-Qinding committee, constituted by the competent authorities of Federal Board of Revenue to investigate shortfall of Rs 450 million in share of surcharge on importation of vehicles under Amnesty Scheme, has completed its inquiry into the matter.

It may be mentioned here that around 1900 vehicles had been cleared under Amnesty Scheme and a shortfall of Rs 450 million in share of surcharge had been recorded.

FBR, owing to this constituted a 3member fact Qinding committee led

by MCC Exports Collector Dr Wasif Memon in order to dig out the real facts behind the entire scenario.

Furthermore, FBR asked the committee to Qile its Qinal recommenda-

tions till April 30. However, the committee had failed to submit its report in stipulated time and submitted it on May 4. The report of fact-Qinding committee, constituted on inquiring about the shortfall of surcharge in clearance of imported vehicles from June, 2012 to 2013 stated that MCC Appraisement-West and MCC Appraisement-East should raise demand notices against those importers, who were found submitting reduced duty/taxes on clearance of imported vehicles during the tenure of June, 2012 to November, 2013 in Vehicle Amnesty Scheme.

FBR sources informed Customs Today that the collectorates have issued demand notices of Rs 328 mil-

lion against 1,397 vehicles, while demand notices worth Rs 122 million would be issued against the importers of 503 vehicles.

Complaints have been registered in the ofQice of the Federal Tax Ombudsman (FTO) regarding the violation of SRO 144(1)/2012 in clearance of vehicles under the Amnesty Scheme. The complaints stated difference of duties/taxes being charged in clearance of vehicles in Karachi and Peshawar.

Later on, Member Customs Nisar Muhammad formed a committee in order to inquire the facts and Qigures in the clearance of 1900 vehicles under the Amnesty Scheme from June, 2012 to November, 2013.

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ISLAMABAD 03

MAy 27 - JuNE 02, 2014

board of Trustees for kpT approved

KARACHI: Board of Trustees for Karachi Port Trust has been approved by the PM. The board was ineffective and important matters were pending since last six months. PM office has forwarded a notification to the Ministry of Ports and Shipping. Members include Nasir-ud-Din Mehmood, Javaid Ashraf, Hussain Saleem, Collector Customs- Preventive, Karachi and Commander Karachi Pakistan Navy. Also included are representatives one each from KCCI, FPCCI, Karachi Cotton Exchange, Pakistan Ship-Owners Association and Karachi Metropolitan Corporation.

PakCustomssaves nationalheritage,2210 ancientcoinsseized akistan Customs has confiscated over two thousand ancient coins belonging to middle ages and before from a passenger attempting to smuggle them to China.

Pakistan Customs revealed that a male passenger namely Mehar Nabi was supposed to board the flight to urumqi in Xinjiang province in China.When Customs staff at Islamabad International Airport went through his baggage they found out the baggage containing 2,210 coins.

The coins belonged to Mogul (Mughal) era and pre-Mogul era i.e. the period of Delhi Sultanate. More stunningly, coins as old as the Sassanid era (circa 500 CE) and Greek era (circa 100 CE) were recognized by the Department of Archaeology and Museums which examined the lot.

One of the archaeologists told Customs Today that the coins were extraordinary and the loss to national heritage would have been unimaginable had the man succeeded in transporting them elsewhere out of Pakistan.The man was taken into custody by the police. —CT Report

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Software on import of potatoes working in One-Customs irectorate of Reforms and Automation has formulated software in order to monitor the importation of allocated quota of potatoes at zero rating.

FBR sources informed CustomsToday that the software has been made up in One-Customs instead ofWeBOC as zerorated facility on import was only available in One-Customs. The software has been working since May 15 and will continue to work until clearance of import of 200,000 tonnes of potatoes. —CT Report

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duties on imported vehicles likely to go up in budget ISLAMABAD

CuSTOMS TOdAY REpORT www.customstoday.com

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he Federal Board of Revenue (FBR) is likely to increase duties on imported vehicles in the budget 2014-2015, which will shoot up the car prices in the country.

Background discussions with FBR ofQicials have revealed that the government is likely to increase duties on the import of vehicles in the budget. The ofQicial hinted that the government might increase duties on more than 1300cc cars. The proposal would enhance the car prices in the country if approved by Finance Minister Ishaq Dar. The ofQicials informed that the government is contemplating many other proposals to generate additional revenue next year that included imposition of federal excise duty (FED) on several commodities. The government is likely to enhance the FED on cement from 400 per metric tonnes to 500 PMT in the budget that would increase its prices. Similarly, the government could impose FED on cosmetics, paints and varnishes and lubricating oils in the budget.

However, the ofQicials were of the view that government has no intention to impose duty on the import of gold. According to a senior ofQicial of the FBR, the government has not yet Qinalized the tax exemptions to be withdrawn in the upcoming budget, as he said, “Government is working with relevant stakeholders in this regard”.

Meanwhile, Dar, while chairing a meeting on budget, said that all discriminatory SROs would be abolished

in a period of three years and all stakeholders are working together in this regard. He said that the government believe in taking all stakeholders on board including chambers of commerce, trade bodies, representatives of the industries, exporters and importers in the process of budget making. Dar also chaired a meeting with presidents of Chambers of Commerce (FPCCI, KCCI, LCCI, QCCI, FCCI, Rawalpindi/Islamabad CCI, Gujranwala CCI, Sialkot CCI and Hyderabad CCI) at the FBR to discuss budget related proposals.

The Qinance minister urged the chambers and business community to stay engaged with the FBR for consolidation of budget proposals. He assured them that there will be continuity of economic policies in the country and the reform process will

be completed within a period of three years. He said that the policies of the PML-N will Qill the trust deQicit between FBR and traders and there will be win-win situation for the business community and the government. He welcomed proposals from the trade representatives and assured them that the government will give a serious consideration to their proposals before Qinalizing budget.

The chamber representatives discussed in detail their issues and recommendations. They appreciated the work being done by the Finance Ministry and FBR for SROs rationalization. The traders appreciated strengthening of Pak rupee and observed that it will have positive impact on the economy. They assured the Qinance minister for their cooperation in bringing into the tax net all

those traders who are not tax payers. The traders also appreciated Qinance minister’s personal interest in sales tax refunds. There was a general sense of satisfaction on the economic policies of the government and expectations that reforms will bring positive impact on the country.

The Qinance minister said that it is high time that we all should join hands for our future generations and promoting tax culture will allow the government to spend in socio-economic uplift of the country. He informed the traders that the Qinance ministry has been very strict in bringing down the expenditure of the Federal Government. He said that every rupee of the taxpayers money will be spent wisely and we will not allow corruption at any all level of the government.

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04 NATIONAL

MAy 27 - JuNE 02, 2014

Vehicle assessment, SRO490, air cargo modules rollout in webOC

KARACHI: Directorate of Reforms and Automation has completed its paper work regarding the up gradation of Vehicles Assessment Module, SRO 492 and Air Cargo Module and handed over to PRAL team for software development in WeBOC. The directorate after conducting complete study on aforementioned modules has handed over the upgraded modules to PRAL. the upgraded modules have been rolled out in WeBOC by May 26. One-Customs is now completely outdated in Vehicle Assessment Module.

Fate of sealed petrol pumps: Customs faces hindrance in proceedings he cold response by most of the Oil Marketing Companies in order to verify the legal status of around 23 sealed petrol pumps is creating hindrance in the proceedings of Pakistan Customs officers in deciding their status.

FBR sources confirmed Customs Today that the authorities concerned of Pakistan Customs have held several meetings with the officials of Oil Marketing Companies and sent intimations through email and letters to the companies regarding the authenticity and legality of the sealed petrol pumps.

However, the Oil Marketing Companies have failed to respond to the correspondence of Pakistan Customs officers.

It may be mentioned here that the Chief Collector Enforcement-South Nazim Saleem during a press conference on May, 9 stated that Pakistan Customs had demolished 53 illegal petrol pumps and sealed another 23 petrol pumps for verifying their legal status.

On the occasion, Chief Collector Enforcement-South further stated that the Pakistan Customs authorities will take a week’s time to check the authenticity of the sealed petrol pumps.

Sources were of the view that the issue was in doldrums due to the apathy of OMCs towards the verification of sealed petrol pumps, despite passing of two weeks. —CT Report

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CustomsIntelligence confiscates912 smuggledLEDTVs,tyres LAHORE

CuSTOMS TOdAY REpORT www.customstoday.com

irectorate General of Intelligence and Investigation-Customs has seized smuggled items worth millions of rupees while raiding shops and warehouses across the country on tip-offs.

Sources said DI&I Lahore launched a raid in areas adjacent to vegetable market and confiscated 912 LED televisions and 180 tyres. The items were confirmed to be smuggled and concealed in a warehouse.

Anti-smuggling operations were also launched in Rawalpindi.

Customs check posts have been alerted to break the chain helping smugglers transport contrabands. Chaman and Landi Kotal are the two basic points of smuggling where it happens in the guise of imports through transit trade. Sources said that on the directives of Finance Minister and FBR Chairman, Pakistan Customs would set up customs check posts every 50 to 100 km which would hinder the easy flow of smuggled goods. Authorities concerned are ordered to take strict measures to curb the menace of smuggling.

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Customs swings into action against vehicles import on F fake MoC documents

FBR may miss twice-revised revenue target

KARACHI

CuSTOMS TOdAY REpORT www.customstoday.com

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CC Appraisement-West has withheld two out of seven vehicles imported on fake permission letter of Ministry of Commerce while Collector of MCC Appraisement-West Muhammad Saleem has pledged Qirm commitment and determination to unveil the real culprits behind the illegal importation of vehicles on fake documents.

Collector Saleem informed Customs Today that two vehicles among seven have been conQiscated by the Collectorate and the accused import manager namely, Muhammad Azam of M/s Trade Line International has been arrested. A notice under section 171 of the Customs Act, 1969 has been served to him, he informed.

“Efforts are being made to arrest the remaining accused persons and to recover the other vehicles,” the Collector added.

He further informed this scribe that an FIR has been lodged accordingly for detailed investigation of the crime, adding that remaining imported vehicles would be recovered within a week.

It may be mentioned here that through Appraising OfQicer in AIB/PRV Section, Muhammad Naeem Khan it came into knowledge of the collectorate that the vehicles were imported in the name of Pakistani nationals, from Japan, under the provisions mentioned in Appendix-E to para 15 of the Import Policy, 2013.

The importers who were involved in importation of the vehicles on fake permission letter were Ihsanullah, Moosa Khan, Muhammad Khan, Qamar-uddin Fakhar, Safdar Ali, Wajid Ali and Amanullah, who imported two Toyota Premio, Model 2008; three Mercedes

Two vehicles among seven have been confiscated by the Collectorate and the accused import manager namely, Muhammad Azam of M/s Trade Line International has been arrested

C-200 Model 2008; and two Toyota Rush, Model 2007.

Goods Declaration bearing no KAPR-HC-25876, dated 22-02-2014; KAPR-HC-25873, dated 22-02-2014; KAPR-HC-25828, dated 22-02-2014; KAPR-HC-25829, dated 22-02-2014; KAPR-HC-18232, dated 06-12-2013; KAPR-HC-16146, dated 21-11-2013; and KAPR-HC-11322, dated 14-102013 for clearance of the aforesaid vehicles mentioned at serial No. 1 to 7 respectively were Qiled through Customs agents namely M/s Trade Line International and M/s Services.

Furthermore, on scrutiny of the import documents and the declaration made by the importer, the age of imported vehicles were found older than three years and were not importable under sub-clause (2) of the clause (3) of Appendix-E of the Import Policy 2013, therefore, the release of the vehicles was disallowed.

Subsequently, the abovementioned customs agents on behalf of the importers provided an import permission No. 11(2)/2009-Imp-I, dated 06-03-2014 from Ministry of Commerce for release of aforementioned vehicles on one time basis subject to payment of surcharge @ 5 per cent of C&F Value and leviable duty/taxes. The vehicles were accordingly allowed release. Thereafter, the Ministry of Commerce vide its letter bearing No. 10(18)/2012-Imp-II, dated 14-05-2014, informed that the permission letter, dated 06-03-2014 provided for the release of the afore-referred vehicles, imported in contravention of the Import Policy Order, 2013 was neither embossed nor issued by the section concerned of the Ministry of Commerce and it was, therefore, fake.

Thus, it was established that the accused persons and their associates clearing/customs agents have contravened the provisions of Section 2(s) and 16 and are guilty of the offences as deQined under Section 32(I), 32A(I)(a) and 192, punishable under clause 8,14, 14A,77,86 &89 of Section 156(I) of the Customs Act, 1969, sub-Section (I) of section 3 of Import & Export (Control) Act, 1950 read with Appendix-E of the Import Policy Order-2013 notiQied vide SRO193(I)/2013 dated 08-03-2013, further read with SRO566(I)/2005 dated 06-02-2005.

BR is most likely to miss the twicerevised revenue collection target of Rs2,275 billion by wide margin during the about to end financial year 2013-14.

According to reports, the FBR will hardly reach at Rs2,250 billion, or even less, against the revised target of Rs2275 billion by the end of June 2014.The reports said that the Finance Minister had been taken into the loop that the revised revenue collection target will be difficult to achieve.The FBR is likely to reach around near to Rs2,250 billion.The reports pointed out that the FBR’s revenue collection is hit by the rupee appreciation against the dollar and reduction in imports apart from other reasons.

The PML-N government remained fail to improve the performance of the Federal Board of Revenue that has not shown impressive work this year.The government had kept unrealistic tax collection target of Rs2,475 billon for the ongoing fiscal year 2013-14 in the last budget. However, the International Monetary Fund (IMF) and independent economic experts forecasted that government has set ambitious target in the budget.Therefore, the government has revised the target twice in ten months period because of poor performance of the tax bosses.The government had first revised the target by Rs 130 billion to Rs 2345 billion in February 2014 from the budgetary target of Rs 2475 billion.

However, the tax department was struggling to achieve the target of Rs 2345 billion, which later slashed to Rs 2275 billion in May 2014 after holding discussion with IMF. The FBR has collected Rs 1,745 billion during ten months during ten months (July to April) of the ongoing financial year 2013-14 as against Rs 1509 billion of the corresponding period of last year, registering a growth of 15 percent.The actual tax collection of the FBR in ten months is Rs 1,646 billion, as it has withheld Rs 97 billion of the tax refunds of the taxpayers. —CT Report

Rs71.3m duty evasion

ContraventionReportmadeagainstM/sFazalSardartextilemills KARACHI

CuSTOMS TOdAY REpORT www.customstoday.com

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odel Customs Collectorate of Exports has made the Contravention Report (CR) against M/s Fazal Sardar Textile Mills in the pretext of importing goods in excess of face value of license.

M/s Fazal Sardar Textile Mills, located near SharaQi Goth, Korangi Industrial Area was granted a License (PWL-14/2010) on 25-112010 under rule 3(2) of SRO

327(I)/2008 dated 29-03-2008 for the face value of Rs15 million. The license authorizes duty and taxes free import of plant, machinery, equipment, apparatus and capital goods for use solely within the limits of Export Oriented Unit and raw material using the licensed remained valid up to 08-11-2012.

As per the Contravention Report, M/s Fazal Textile was alleged to have imported 10 consignments of machinery/spare parts etc. in their export oriented unit during the period from November, 2010 to June, 2013 and availed exemption of duty/taxes amounting to Rs

86,304,000 i.e. Rs 71,304,000 above the face value of the license of Rs 15million.

The exemption of duty/taxes availed was in excess of the permissible amount of duty/taxes as mentioned in the license, which is violation of Rule 3(i) of Chapter XV of SRO 327(I)/2008 dated 29-032008 and the insurance policy furnished was also of the face value of the license on account of the liabilities involved on imported goods/balance stocks.

According to the Contravention Report made by MCC Exports, M/s Fazal Sardar Textile Mills is re-

quired to pay the amount of customs duty and taxes amounting to Rs 71,304,000 involved on the goods imported in excess of permissible limit of their license in terms of Section 32(3A) of the Customs Act, 1969 along with action under clauses (10A) & (14) of Section 156(1) of the Customs Act, 1969.

The Contravention Report has been moved by MCC Exports in the OfQice of the ADC, Adjudication-II and Show Cause Notice in this regard would be issued by the OfQice of the ADC, Adjudication-II within two to three days.

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NATIONAL

MAy 27 - JuNE 02, 2014

05

Customs judge cancels interim bail of two

LAHORE: Special Judge Customs Tanveer Akbar has cancelled bail of two accused of customs duty evasion worth millions of rupees in betel leaves scandal. Customs Prosecution and Investigation Department was given two days’ remand for recovery of customs duties worth Rs8.5 million from Naeem Tariq and Rs13 million from M Nadeem in betel leaves import. The accused were on interim bail earlier which was cancelled. The Customs authorities arrested the accused right at the court room.

Customs impounds Rs22.534b smuggled goods in 5 years trict surveillance and control has resulted in seizure of smuggled items worth Rs 22.534 billion in Pakistan during the last five years.

According to Pakistan Customs sources the year 2010-11 witnessed major seizures during the period as the authorities confiscated smuggled goods worth Rs 5.501 billion. In 2012-13 the smuggled items worth Rs 5.329 billion were seized; goods worth Rs 4.905 billion in 2011-12; goods worth Rs 4.929 billion in 2009-10; and goods worth Rs 1.859 billion in 2008-09 were confiscated.

Sources said that enforcement measures have been adopted to curb menace of smuggling which included intelligence sharing, launching of joint operations and provisions of support and facilitation by law enforcement agencies. All entry points have been beefed up and strict surveillance and control is being enforced.The main smuggling route is porous border with Afghanistan and Pak-Iran Border.

Anti-smuggling measures are also taken

by Frontier Corps who are entrusted to carry out anti-smuggling activities within 20 km of international border while joint efforts are also undertaken between Customs and other agencies. Moreover, major entry points and smuggling routes in the country are being monitored by establishment of check posts. Anti-smuggling powers have also been delegated to Pakistan Coast Guards and Pakistan Maritime Security Agency to check smuggling in the coastal areas and high seas.

Scanners have been installed at airports for scanning of baggage of incoming passengers. Director General Intelligence and Investigation-Customs has been assigned the chief role to coordinating anti-smuggling activities with other LEAs. —CT Report

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uniform procedure: Merger of duty-free import schemes likely under the temporary import scheme, the federal government has exempted whole of the customs duty and sales tax on temporary import of goods for subsequent export as specified ISLAMABAD

CuSTOMS TOdAY REpORT www.customstoday.com

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of federal budget through Finance Bill.

The merger of all temporary import schemes would be a key budget proposal for 2014-15. During the on-going budget preparation exercise at the

492(I)/2009 and other schemes like DTRE to facilitate the manufacturerscum-exporters in the upcoming budget (2014-15). Different schemes have separate procedures for tempo-

Federal Board of Revenue (FBR), the authorities are reviewing the budget proposal in consultation with the Ministry of Commerce.

However, the budget proposal has yet to be Qinalised in the light of input of stakeholders. If feasible, it will be made part of the Finance Bill 2014-15.

The idea is to merge all temporary import schemes notiQied vide SRO

rary import of goods to be consumed in the production of export products.

DTRE scheme has different procedure as compared to duty free imports made by the ''Manufacturing Bonds scheme'' or ''temporary import schemes'' notiQied vide SRO 492(I)/2009.

Under the temporary import scheme, the federal government has exempted whole of the customs duty

he government may merge all temporary import schemes including Duty and Tax Remission Scheme (DTRE), Manufacturing Bonds Scheme and others in budget (2014-15) to provide a uniform procedure for import of duty-free items t o

be used in the Qinished products meant for export by the manufacturers-cum-exporters.

As per details, the temporary imports schemes like DTRE are usually amended in the Trade Policy by the Ministry of Commerce or at the time

and sales tax on temporary import of goods for subsequent export as speciQied.

This facility shall be available to exporters also registered as manufacturers; (ii) the importer shall make an application for grant of exemption to the Collector of Customs, giving full particulars of the goods and the purpose for which they are imported; (iii) the importer shall submit a bank guarantee or pay order or indemnity bond along w i t h post-

dated cheque equivalent to the amount of customs-duty and sales tax otherwise leviable thereon; (iv) the importer shall export temporarily imported goods after due processing thereof within eighteen months of their import.

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SPECIALREPORT

MAy 27 - JuNE 02, 2014

The consignments of uniform descriptions are finalized within the average time of 30 minutes and this time would be reduced further in future. MCC Appraisement-west will introduce the latest technology like ipads and tablets at all other terminals in near future after reviewing the pilot project at kICT.

EXAMINERS AT kICT EquIp wITH IpAdS,TAbLETS KARACHI

IMRAN MIRANI

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odel Customs Collectorate of Appraisement-West has provided iPads and computer tablets to the examiners posted at Karachi International Container Terminal (KICT) for speedy examination of the consignments. The ofQicers of Pakistan Customs-FBR at KICT are quite satisQied and contented on the introduction of iPads and tablets for the examiners in order to Qinalize their assignments without any hassle.

The initiative is taken by Model Customs Collectorate (MCC) of Appraisement (West), for Qirst time in the history of Pakistan Customs.

Chief Collector Appraisement-South Nasir Masroor Ahmed and Collector of Model Customs Collectorate of Appraisement-West, Muhammad Saleem along with the team of Customs Today visited Karachi International Container Terminal (KICT) in order to inspect the working of examining ofQicials after getting iPads and tablets of latest technology for examining and assessing Goods Declarations (GDs).

Chief Collector Appraisement-South and Collector MCC Appraisement-West accompanied by entire team of KICT Customs ofQicers including Additional Collector Dr Moin-Ud-din Ahmed Wani, Deputy Collector Muhammad Raza, Deputy Collector Auction Naveed Iqbal, Assistant Collector Usman Tariq and examining ofQicials.

During the visit, Chief Collector Nasir Masroor and Collector Muhammad Saleem closely supervised the performance of examining ofQicials in examining the GDs on iPads and tablets.

The examiners while sharing their views with Customs Today said that they are going to upload all examination reports from examining area.

“It is quite an efQicient process. We Qile the reports and send these reports just after completion,” one of the examining ofQicers said.

Another ofQicer said that the GDs were being examined more thoroughly by iPads and tablets, adding that the entire process of examination has been expedited by the introduction of latest technology at KICT. The Pakistan Customs ofQicers at KICT shared their views with Customs Today regarding the introduction of iPads and PC tablets for examiners.

Collector MCC-Appraisement-West Muhammad Saleem said that the collectorate has provided iPads and computer tablets to the examination staff at KICT for quick disposal of examination reports, adding that clear instructions have been issued to all examination ofQicials to Qile reports from examination area with the help of their iPads.

“In the history of Pakistan Customs,

provision of gadgets to improve performance and facilitate trade through speedy disposal of examination reports

KICT is the only terminal and MCC praisement-West is the only collecto which has provided latest technology t examiners,” he added.

Collector Muhammad Saleem said the consignments of uniform descript have been Qinalized within the average t of 30 minutes and this time would be duced further in future.

He further informed that MCC praisement-West will introduce the la technology like iPads and tablets a other terminals in near future after viewing the pilot project at KICT. Muhammad Saleem further said the trade would surely be facilita through the step taken by the co torate, adding that it would also s time of importers as well as cust ofQicials.

The Collector MCC Appraisem West said that the manual IDs of aminers at KICT would be comple eliminated after a month and all wo be transferred to automated system.

To a query, Collector MCC Appra ment-West, Muhammad Saleem reve that all examining ofQicials at all other minals would be provided with iPads tablets within two months time.

Additional Collector, MCC-Appraisem (West) Dr Moin-Ud-Din Ahmad Wani of the view that the introduction of la technology -- iPads and tablets -- in ex ination area of KICT will deQinitely el nate hindrances being faced by impor and traders in examination process.

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MAy 27 - JuNE 02, 2014

SPECIALREPORT 07

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“It will deQinitely improve the efQiciency and competency of examining ofQicials, adding that Wi-Fi facility would also be provided in iPads and tablets”, he added.

The Additional Collector further informed this scribe that the training sessions and security features would also be introduced in the entire process.

He further said that the periodically exams of the examining ofQicials would also be conducted at regular intervals, adding that the examiners can log-in and submit their reports through their tablets and iPads at a time.

“Our top most priority and basic aim is to facilitate the trade and importers and this facility would also be introduced at off-dock terminals in near future”, he asserted.

Muhammad Raza, Deputy Collector at KICT said that the introduction of iPads and tablets at the terminal will deQinitely play its role in reduction of examination time.

Terming it a good initiative taken by the MCC-Appraisement (West), Muhammad Raza said that the main purpose of the step is to facilitate the trade at large extent.

Usman Tariq, Assistant Collector at KICT said that all reports would be sent through iPads and tablets from June 10, adding that the Collectorate of Appraisement (West) wanted to increase its efQiciency in order to facilitate the trade. He admitted that the Wi-Fi connectivity problem has been reported but it would be redressed soon.

— Exclusive Customs Today photos

ppEd

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08 EDITORIAL

MAy 27 - JuNE 02, 2014

Founder & Chairman Zulfiqar Ali Editor Rahil Yasin editor@customstoday.com.pk For advertising & subscription marketing@customstoday.com.pk +92-322-3370002 www.customstoday.com Phones: 042-35781643-4, Fax: 042-35781645 Address: 627, Siddiq Trade Centre, Gulberg, Lahore

EdITORIAL

direction for the next budget

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he next budget 2014-15, going to be presented

by Finance Minister Ishaq Dar to the National Assembly on June 3, will focus upon the efforts of the government to maximize revenues without increasing tax rates and burdening the existing taxpayers anymore.

This strategy, endorsed by both the IMF and World Bank, is going to rely mainly on abolishing tax exemptions and bringing those people into tax net who never get bothered paying a penny into the national kitty.

The government is preparing its next budget with an aim to broaden the narrowed tax base instead of relying on increasing tax rates. Another focus of the government is to simplify the rules and procedures to facilitate the taxpayers.

Different studies and researches have given empirical evidence that the raise in tax rates results into increase in its evasion. By reducing tax rates, tax revenues ultimately increase because it gives incentive to bring into the tax system rather than bearing cost of remaining outside the tax system.

FBR has fixed its target to bring 100,000 new taxpayers into the tax system in the next budget.

The Finance Minister, while finalizing budget 2014-15, had directed the FBR Members to simplify the procedures involved in filing returns and incentives be given to the return filers as compared to the non filers. The taxpayers should be facilitated by simplifying tax reporting so that people prefer to pay taxes rather than evading tax process.

The key objectives of FBR will be monitored through increase in the tax-to-GDP ratio by two digit percentage points from 9 per cent to 14 per cent by removing special tax exemptions and expanding tax revenues at provincial level.

Some trade related SROs will also be abolished in the budget in order to remove undesired advantages for specific groups and influential segments. The government will also eliminate income tax exemptions in order to fetch revenues equal to 0.2 per cent of GDP into the national kitty.

On other hand, the government has decided to curtail unnecessary expenditures in the next budget in order to achieve the budget deficit target at 4.8 per cent of GDP agreed with the IMF. Keeping in view tight fiscal framework, the increase in salaries and pension will remain in the range of 10 to 15 per cent in the upcoming budget. The salaries might be increased up to 15 per cent from grade 1 to 17 and 10 per cent from grade 18 to 22 in the budget 2014-15.

In achieving overall fiscal framework and financial discipline under the IMF program, the development program should not become victim as axe always falls on developmental allocations. It should be protected at all costs to jump-start sluggish economic activities in our country.

Tax reforms strategy ISLAMABAD

SM HAIdER

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n its bid to obtain over $350 million loan from the World Bank as well as grants from UK-based Department for International Development (DFID), Pakistan has committed to undertake crucial tax reforms over the next three years till 2016-17.

Although, all such efforts have proved futile but this time again promises were made that the money obtained from the WB would not be wasted on purchasing vehicles, constructing buildings and foreign tours but efforts would be made to improve capacity building and enhance use of technology for the purpose of increasing compliance and avoiding tax leakages.

Under the tax reform strategy, Pakistan has developed an ambitious plan for increasing stagnant tax-to-GDP ratio hovering around 8.5 percent to close to 14 percent over the medium term.

But the greatest challenge for the incumbent regime is to make this dream a reality which requires a number of bold steps in months ahead in order to match

words with the actions.

Islamabad’s economic managers have informed the IMF and World Bank that two/third of such efforts would have to come from the federal government and one quarter from the provincial governments.The success of this strategy will rely on signiQicant improvement in tax compliance and in the broadening of the tax base by improving registration, closing the tax gaps and making taxation more equitable.

Such a goal is consistent with its commitment to achieve a sustainable deQicit of around 4 percent of GDP by FY2016/17 where over half of such adjustment should come from revenue mobilization.

The FBR tax reform strategy relies on some major pillars including tax policy measures, measures to increase the tax base (the elimination of exemptions rooted in distortive Statutory Regulatory Orders--SROs), and improved tax administration. With a broader tax base and higher collection, the government expects to avoid further increases in tax rates.

Broadening the tax net relies on a 3year program of elimination of most tax exemptions and loopholes granted through Statutory Regulatory Orders (SROs). The ultimate objective of the SRO

Broadening the tax net relies on a 3-year program of elimination of most tax exemptions granted through SROs

plan is to achieve an increase in revenues of some 1–1.5 percent of GDP, with all designated SROs eliminated in no more than three years. So far, GOP has issued no new SROs granting so-called “special exemptions,” compared to some 56 in the previous Qiscal year, and by end-December 2015 legislation is expected to permanently prohibit the practice. FBR plans to start eliminating the Qirst batch of SROs identiQied in the FY2014/15 budget, to be approved by end-June, as part of a package of identiQied actions totaling 0.75 percent of GDP. Necessary changes will also be made in the tax laws to prohibit a future resort to such adhoc policy measures.

Tax administration reforms are projected to gradually deliver further improvements in revenue collections.

A massive initiative to incorporate 300 thousand new taxpayers into the income tax net is moving ahead. FBR is on track to issue 75,000 Qirst notices by end-March and to follow up with a second notice to at least 75 percent of those who did not respond satisfactorily to their Qirst notice.

The objective is to broaden narrowed tax base where only less than 0.7 million people Qiled their tax returns out of total 180 million populations.

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MAy 27 - JuNE 02, 2014

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fbR seizes Al Makkah press bank account, recovers Rs 1,235,000 tax

LAHORE: Federal Board of Revenue Regional Tax Office has recovered Rs 1,235,000 from bank accounts of Al- Makkah Press (private) Limited as tax for the Tax Year 2011-12. FBR recovered the amount of tax directly by seizing accounts of the company at Habib Metropolitan Bank Limited, Model Town Branch. Meanwhile, Customs anti-smuggling scout impounded one Toyota Corolla at the Liberty Market. Anti-smuggling inspector Khalid Butt impounded the car on a tip-off. The car was being used under fake number plate.

Revenue shortfall may prompt share cut for provinces wing the likely shortfall of Rs180 billion in the revenue of divisible pool, the provinces are expected to receive around Rs100 billion less from the budgeted projection for the current fiscal year.

The share of provinces were projected at Rs1,380 billion in the current fiscal year from the divisible pool taxes but due to the shortfall in tax collection, now they are likely to receive around Rs1,280 billion. This was largely because of downward revision in FBR tax collection from budgeted Rs2,475 billion to revised target of Rs2,275 billion for the current fiscal year. The divisible pool comprises direct taxes, sales tax, customs duty, export duties and federal excise duty. under the NFC Award, provinces get 57.5 percent of the revenue collected by the FBR through the divisible pool. The FBR has estimated a revenue shortfall of Rs200 billion in the last quarter (April-June) of 2013-14 despite FBR Chairman's assurance that Rs 2,270 billion to Rs2,275 billion will be collected by the end of current fiscal year.

On the basis of revised target of Rs2,345 billion, the downward revised revenue collection target for last quarter (April-June) 2013-14 was Rs775 billion. The revised revenue collection target for April 2014 was Rs 196.3 billion, May 2014 Rs219.5 billion and for June 2014 at Rs359.2 billion.

However, the set targets have been further scaled down following second downward revision in revenue collection targets from Rs2,345 billion to Rs2,275 billion. —CT Report

O

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: letters@customstoday.com.pk

Rs2,000b shortfall in revenue: TIp reminds dar of action ISLAMABAD

CuSTOMS TOdAY REpORT www.customstoday.com

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he Transparency International Pakistan (TIP) has claimed that the government has failed to implement its recommendation made on the order of the Supreme Court of Pakistan in Oct 2013 which would have increased revenue collection from Rs 1,942 billion to Rs 4,000 billion.

In a letter sent to Federal Finance Minister Ishaq Dar, TI-Pakistan Adviser Sohail Muzaffar has invited his attention to the report prepared at the behest of FBR by International Centre for Public Policy, University of Georgia estimating over Rs1,800 billion tax evasion annually.

“The FBR report of Rs1,800 billion short collection of taxes, conQirms the TI Pakistan report which had indicated Rs2,000 billion shortfall in collection by FBR, submitted in the Supreme Court of Pakistan on Oct 3, 2013,” he said.

He informed the minister that in the civil misc application 2013 Qiled in the Supreme Court in the suo motu case regarding law and order situation in Karachi, on Oct 29, the TIP was asked by the Chief Justice of Pakistan to provide a rough Qigure of annual leakage in collection of revenue.

The Supreme Court was informed that public is paying taxes, but the businessmen are not fully depositing

If the political will of the govt and FBR chairman is there, the TIP scheme for achieving the goal of zero tolerance against corruption will ensure the Tax-GDP-ratio of 16pc in 1 year revenue in treasury. Further TI-Pakistan was informed that due to the malice of Qlying invoices, the GST adjustments are mostly on fake documents. On a question asked by the Chief Justice of Pakistan, as to what measure could be taken to plug this huge tax loss, TIP had stated that "if

the political will of the government and the FBR chairman is there, the scheme for achieving the goal of zero tolerance against corruption could be prepared by TIP, and that this scheme will ensure the Tax-GDPratio to increase from 8 percent to 16 percent in one year.

The Chief Justice had directed the TIP to prepare proposals and submit it in the apex court on Oct 30, 2013.

Sohail Muzaffar said the proposal was submitted on Oct 30, 2013, which needs to be implemented in toto, and "is sure to generate approximately additional Rs2,000 billion tax. Loss of one day may result loss of Rs6 billion revenue.

The minister has been requested to examine the TIP proposal for the budget of 2014/15, and if possible act on the recommendations which are very simple and easy to apply. In accordance with the orders given by the Chief Justice on Oct 29, 2013, Syed Adil Gilani the then adviser, the TIP had submitted following recommendations to curb tax evasion in FBR, and make it a department of "Zero Tolerance against Corruption," and plug the estimated tax leakage of Rs2,000 billion per annum.

The recommendations had covered customs, administrative and technological measures, risk management of containers, transportation of containers, en route monitoring, and receipt of containers at border customs-stations. Legal midterm and long-term measures, recommendations were also made to broaden income tax net. Similarly, major corruption was identiQied in refund of sales tax and its adjustment. The TIP recommended that as a policy, the FBR should abolish adjustments and refund. It pointed that If the FBR makes irrevocable policy of “No Refunds No Adjustments” total GST leakages by frauds/evasions will be stopped.

upgradationofCustomsLaboratory To, Tariq Bajwa, Chairman FBR, Islamabad

chemicals have already been tested in the customs laboratory are again required to get tested from some other laboratory such as Haji Ibrahim Jamal Institute or PCSIR Lab, due to the reason that the results of the customs laboratory is not reliable thus causing inordinate delay in clearance of goods and unnecessary financial burden and losses to the trader in the form of demurrage/detention charges.

Through this letter, I would also like to request that the test report of an item should be valid for at least three months. I hope that you will look into this issue on immediate basis and will take the necessary steps in this regard.

Respected Sir, With due reverence, I would like to draw your kind attention towards a sensitive issue regarding the upgradation of Customs Laboratory.

Sir, Pakistan Customs has not upgraded its laboratory for the last more than 60 years. Federal Board of Revenue should either upgrade it or allow the private sector for establishment of a state of the art modern laboratory at its Karachi Station.

The establishment of contemporary and latest laboratory at Karachi Station will deQinitely facilitate the importers and exporters with speedy, hassle-free and reliable test-

ing reports of their goods, particularly of the chemicals.

I would like to inform you that the importers and traders whose

Yours Sincerely, Zakaria Usman, President, FPCCI Karachi

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10 NATIONAL

MAy 27 - JuNE 02, 2014

ANf Lahore seizes opium, charas, vehicles

LAHORE: Anti Narcotics Force recovered huge quantities of opium and charas while seizing the vehicles used for delivery of the drugs. ANF Lahore Road Check team recovered 12kg charas after intercepting two cars near Faisalabad. Similarly, the ANF team recovered 36kg charas and 7.2kg opium from the possession of another three persons. They were in a car being used for drug smuggling. It has also been seized. All the accused were arrested on the spot. Most of them were residents of Peshawar.

ChambersseekclearanceofSTrefunds,CustomsrebateclaimsofSMEs KARACHI

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resident of the Karachi Chamber of Commerce and Industry (KCCI), Abdullah Zaki has informed that Federal Finance Minister Ishaq Dar, after carefully listening to various suggestions pertaining to forthcoming budget during a meeting at FBR House in Islamabad, assured that all these suggestions will be further discussed with Chairman FBR so that they could be considered in the forthcoming budget.

Besides President KCCI, Abdullah Zaki, BMG Vice Chairman Zubair Motiwala and Chairman of KCCI’s Special Committee for Budget Proposals, Qamar Usman, the meeting was also attended by President Islamabad Chamber Shaban Khalid, President Rawalpindi Chamber Dr. Shimail Daud Arain, President KPK Chamber Zahid Ullah Shinwari, President Faisalabad Chamber Engr. Sohail Bin Rasheed, Vice President Lahore Chamber Kashif Anwar,

President Quetta Chamber Muhammad Asim Siddiqui and President Gujranwala Chamber Sheikh Nouman Salahuddin.

Representatives of Pakistan’s business community from various regions of the country underscored the need to effectively deal with pressing issue of harassment being suffered by the taxpayers. In this regard, taxpayers should not be harassed at any stage and should be allowed to appear before the competent authority twice prior to any action against taxpayer.

Seeking access to bank accounts, con-

ducting raids and lodging FIRs should only be done when the taxpayer loses his case after an appeal, they said, adding that the spirit should be to amicably settle issues with the consent of chambers.

Chambers’ Presidents further suggested that all Sales Tax refunds of up to Rs2 million should be cleared whereas all Customs Rebate Claims related to Small & Medium Enterprises (SMEs) should also be settled.

They also pointed out that Alternate Dispute Resolution Committee (ADRC)

needs to be revived and representatives of various chambers’ must also be involved in this important committee at city level.

Chambers’ President also stressed that a roadmap should be deQined to gradually bring down Sales Tax to single digit in the next three years and this reduction in Sales Tax should begin from current year.

Expressing concerns over high duties, sales tax and other taxes on healthcare products, Chambers’ Presidents said that duties and taxes on all healthcare products need to be brought down.

M/s Eastern garments booked in tax evasion of Rs96.6m, Contravention Report issued KARACHI

CuSTOMS TOdAY REpORT www.customstoday.com

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odel Customs Collectorate of Exports has issued a Contravention Report (CR) against M/s Eastern Garments (Pvt) Limited for violation of Section 19 and 32(3A) of the Customs Act, 1969 read with Rule 3(1) (f)(i) and (j) of SRO327(I)/2008 which included tax evasion of Rs 96,582,274 including Rs 92,881,179 in share of

customs duty and taxes and Rs 3,701,095 in excess of imported goods against permissible limit of the face value of license.

M/s Eastern Garments (Pvt) Limited, imported machinery/spare parts in their Export Oriented Unit during the period from 7-12-2009 to 14-12-2011 and availed exemption of customs duty/taxes amounting to Rs 20,476,761 above the face value of the license. Thereafter in the subsequent period with effect from 15-12-2011 to 31-12-2013, under the license further im-

ported machinery/spare parts and raw material valuing Rs 246,320,523 and availed exemption of duties/taxes amounting to Rs 92,404,418. The Contravention Report stated total exemption availed was Rs 112,881,179 in excess of the permissible limit of exemption of duty and taxes of Rs 20 million as endorsed on the license as face value, which was the violation of Rule 3(1)(f)(i)&(j) of SRO327(i)/2008. Consequently, the insurance policy furnished equal to the face value of the license also fell short on the ac-

count of the liabilities involved on imported goods/balance stocks.

According to the Contravention Report, M/s Eastern Garments (Pvt) Limited have also imported Neck Tape (5807.1030) and Sublimation Paper (4821.9000) without authorization or without getting them included/endorsed on the license covering the duty/taxes amounting to Rs 3,701,095. The Contravention Report has been forwarded to the ofQice of the Additional Collector of the Customs Collectorate of Adjudication-II.

Al Moeez sugar mill evades Rs 80m tax BR has recovered Rs 3 million from bank account of Al Moeez Sugar Mill in Bank Alfalah Branch in Gulberg.

According to details, Al Moeez Sugar Industries was to pay Rs 80 million as taxes for the Tax year 2012-13.

However, the Sugar Mill did not pay due taxes despite repeated notices to the mill owners, official sources said. Sources added that FBR recovered Rs 3 million from 8 bank accounts of the mill.

Sources said that the mill is operational in Dera Ghazi Khan; however, it has a registered office in Lahore which lies under the jurisdiction of Regional Tax Office Lahore-II. —CT Report

F

ISLAMAbAd: Prime Minister Muhammad Nawaz Sharif addressing the 3G/ 4GLicense awarding ceremony.

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CARTOONSSPCEIAL 11

MAy 27 - JuNE 02, 2014

Smuggling attempt: german customs recovers 90 animals from suitcase

FRANKFURT: Customs officials at Frankfurt Airport have discovered 90 exotic animals in a suitcase, including 55 tortoises, 30 lizards, vipers and an iguana. Some were endangered species and died during the journey. A 44-yearold Mexican was arrested for smuggling the reptiles in a single suitcase. The snakes were kept in two knotted pairs of women's tights, while lizards were held in canvas bags and packed in boxes. The creatures were valued between €50,000 and €60,000. It was found that a pregnant arboreal alligator lizard had also laid eggs during the flight.

govt balking at stripping VIps of exemptions he federal government is balking at the possibility of withdrawing income tax exemptions from VIPs holding public offices on significant portions of their salaries, undermining the principle of equity as applied on the rest of the salaried class — which is charged income tax on gross salaries.

At present, income tax on salaries of the president, provincial governors, services chiefs, corps commanders, Supreme Court and high court judges and federal ministries is charged by excluding expenses under various heads. Their salaries are taxable after excluding expenditures on conveyance, residence, entertainment, travel and allowances, shows the Income Tax Ordinance of 2001. Similarly, the monetisation allowance that all federal secretaries, additional secretaries and joint secretaries receive is separately charged by taking it out from gross salaries aimed at avoiding higher rate of income tax, applied on those falling under higher income brackets. A federal secretary gets Rs97,000 monthly car allowance, which is charged at the rate of 5% by separately treating it.

Almost all federal bureaucrats serving in Grade 20 to

T

22 are not only availing hefty car allowances but also using official cars, which is contrary to the spirit of paying them in cash. unlike these VIPs, the salaries of all civilians and military personnel are taxable on gross value of their incomes, creating inequity in the tax system that is tilted in favour of the country’s elite, according to independent tax experts. Sources said the Federal Board of Revenue was not ready to include a proposal of withdrawing these exemptions from the upcoming budget. Apart from these exemptions, the remaining salaries of all these VIPs are taxable, according to the FBR. FBR Chairman Tariq Bajwa has recently hinted at not touching income tax exemptions available to the VIPs. He had told the Senate Standing Committee on Finance that out of Rs480 billion tax exemptions only half of these could be withdrawn as the rest are protected under the law and the constitution.

Who is getting what? According to Clause 51 of second schedule of the Income Tax Ordinance of 2001 that deals in tax exemptions and concessions, the expenses incurred on paying house rent of the president, services chiefs, and provincial governors will be free of income tax. —CT Report

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MAy 27 - JuNE 02, 2014

Published by M. F. Riaz, Off. 91, 3rd Flr, Gul Plaza, M.A. Rd., Karachi, for Customs Today and Printed at Dhoom Printing Press Masheer Mahal Building, Off: I. I. Chundrigar Road, Karachi