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Multan Appraisement intensifies its operation against importers involved in under-invoicing & mis-declaration

Multan Appraisement intensifies its operation against importers involved in under-invoicing & mis-declaration

MULTAN: Collectorate of Customs Appraisement & Facilitation has intensified its operations against importers responsible for under-invoicing, over-invoicing and mis-declaration after the recommendations of FTO.

It is pertinent to mention here that Federal Tax Ombudsman (FTO) has directed Federal Board of Revenue to introduce a law to ensure cross-matching of values declared in export documents at export stations with the import documents filed in Pakistan.

According to the FTO’s recently issued report, the FTO office has made recommendations to the FBR for checking under-invoicing. It was recommended to provide a mechanism in law for cross-matching of value declared on export documents of exporting station to import documents at importing station, FTO report added.

The FTO had recommended to FBR to seek information from the Director General, UAE Customs under mutual legal assistance agreements for verification of origin of goods.

In the past, the FTO had also directed the Directorate General of Post Clearance Audit (PCA) to carry out post-import transaction verification of all relevant GDs so as to satisfy the accuracy and authenticity of declared import values on the basis of export documents/ information obtained through Commercial Counsellors posted in South Korea and UAE.

The FTO had also directed the FBR that the Director of Customs Valuation to check accuracy of values declared by the importers and determine custom value for assessment of inorganic chrome pigments in terms of Section 25A of the Act; 4. to direct the Chief Collector (Appraisement), to ensure finalization of investigation expeditiously and take appropriate action in cases where mis-declaration is established.

The FTO has also asked the FBR to recommend to the Ministry of Commerce to frame and enforce Rules of Origin in respect of goods suspected of circumvention and import from free ports which are not covered under Preferential Trade Agreement. Also, make it mandatory to furnish Certificate of Origin from respective country of manufacture duly verified by the respective government, FTO added. Meanwhile, Pakistan Customs is already obtaining export documents from some of the major trading partners of the country, including China, UAE, Singapore, South Korea and Hong Kong, to avert under-invoicing.

According to details issued by the Federal Board of Revenue (FBR) in the past, Pakistan Customs has intensified its operations against the importers responsible for under-invoicing, over-invoicing and mis-declaration.

The Federal Board of Revenue has found that the importers established some shell companies in Dubai which were used for the transfer of the amounts of the under-invoiced goods while the remaining amounts were transferred through Hawala/Hundi. Pakistan Customs has initiated serious action against such importers. Pakistan Customs has put in place proactive/preventive mechanism to effectively control under-invoicing/ over-invoicing and mis-declaration (at the import stage), keeping in view the fact that these phenomena not only cause revenue hemorrhage and loss to domestic industries, but the same are an instrumental source of trade-based money-laundering and terror financing. Such malpractices are now treated as fiscal fraud under the Customs Act of 1969.