A wary effort to equivocate taxes of almost Rs 300 million by Mobilink has been identified by the Federal Board of Revenue (FBR).
“Mobilink has imported ‘Lead Acid VRLA Batteries for Telephone Exchanges’ and tried to evade duties/taxes by misdeclaring these multi-purpose batteries under incorrect Pakistan Custom Tariff (PCT) heading.”
FBR Identifies Tax Evasion of Rs 300 million by Mobilink
They revealed that during the inspection of import data of ‘Lead Acid VRLA Batteries for Telephone Exchanges’ falling under PCT heading 8507.2010, indictable to Custom Duty at 10%, it has been witnessed by the Customs Directorate of Post Clearance Audit (PCA) that some mobile communication companies have imported multi-purpose batteries, patently not for use in telephone exchanges under this PCT heading, whereas such batteries are correctly classifiable under PCT heading 8507.2090 chargeable to customs duty at 20 %.
Therefore misdeclaring these multi-purpose batteries under PCT heading 8507.2010, Mobilink has made a cautious and determined effort to avoid duty, the PCA believed.
The FBR has served an infringement report on the importer, avowing that Mobilink is requisite to pay Rs 300 million short paid taxes in given time.
On the other hand if Mobilink is of the view that audit observation is not accurate, the company can either come personally or can send authorized representative or can simply give self-explanatory on paper explanation accompanied by backup documents to the FBR.
According to facts, Mobilink has imported ‘cellular infrastructure equipment for telecom sector consisting of VRLA Gel Battery (12V)’, Rechargeable Battery (12V) and SBS EON 190 (12V) by misdeclaring them in the PCT heading 8507.2010 (a specified heading for Lead Acid Batteries used in Telephone Exchanges) chargeable to customs duty at 10% rather than announcing them under their correct PCT heading 8507.2090 chargeable at 20 %.
Sources have indicated that although having cleared similar goods under right PCT headings in February 2015, Mobilink, with the active participation of their clearing managers, Saspak Cargo (Pvt) Ltd and Eastern Freighters, has eluded/short paid duty of Rs 199.4 million, sales tax Rs 69.3 million, extra sales tax Rs 9.98 million and income tax Rs 14.6 million, making total amount to around Rs 300 million in its recent import deal.
It will be believed that the company has nothing to give in its defense or denial of this audit statement and the case shall be dealt with according to law on the basis of figures available on record, if the company fails to come or reply by the particular date, the sources informed.
“There were some other mobile operators found responsible for not declaring the imported goods under incorrect PCTs as well, however, the all other mobile companies have been paid the short paid taxes/duties in the required time to FBR.”