Sources said that a credible information was received by Shaukat Ali, Director General, Intelligence & Investigation, FBR, Islamabad, that a distributor of Lahore was importing "Camel" brand cigarettes on which Federal Excise Duty (FED) and Sales Tax (ST) were payable on the retail price but this price was so low that it did not cover even the duties and taxes paid by the importer on the imported goods.
Under the law, FED and ST on cigarettes are payable on the retail price to be fixed inclusive of all duties, charges and taxes (excluding the sales tax) at which any particular brand or variety of such goods should be sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest of such price and such retail price shall, unless otherwise directed by the Board, be legibly, prominently and indelibly indicated on each packet.
Furthermore, under SRO 53(KE)/2009 dated 01.07.2009, it has been ordained that free goods, cash rebates, free samples , discount of goods below the market value shall not be given or offered for the purpose of advertisement of tobacco or tobacco product to consumers of tobacco products to generate sales or promote smoking.
According to sources, Director General Shaukat Ali passed on the information to Zeba Hai Azhar, Director Directorate of Intelligence & Investigation-FBR, Lahore, who assigned the task to Deputy Director Honnak Bloch. The record revealed that the said importer recently imported seven consignments of as many as 2,219,000 packets of cigarettes of "Camel" brand by declaring retail prices in the range of Rs 57.26/packet to Rs 61.53/packet, the actual retail prices (excluding sales tax) are in the range of Rs 93.74/packet to Rs 101.8/packet. Since FED and ST are payable on retail prices inclusive of all duties, taxes and other charges, it is obvious that by printing a factually incorrect retail price on packets, the importer in collusion with the clearing agent had not only circumvented the mandatory requirement of law as to printing of retail price (which has to be correct RP and in case of incorrect RP it would have to be presumed that the legal requirement of printing RP has not been followed) but also consequently evaded duties and taxes to the tune of Rs 90,652,424.
The directorate has forwarded the contravention case to the Collector of Customs (Adjudication), Lahore, for violations of sections 79, 80, 32(1)(2) of the Customs Act, 1969 punishable under section 156(1) 9,14 ibid. read with Section 3, 12(4) of the Federal Excise Act, 2005 punishable u/s 19 ibid. and section 3(2)(a) of the Sales Tax Act, 1990, read with section 2(37) ibid. punishable under 33(11) ibid, sources added.
Copyright Business Recorder, 2017