Sources told Business Recorder here on Wednesday that the performance of the Directorate General for the financial year 2016-17 has surpassed all previous records of achievement in a single financial year. Goods valuing Rs 8,111 million were seized during 2016-17, besides detection of evasion of duty/taxes to the tune of Rs 6,363 million taking the total to Rs 14,474 million as compared to that of Rs 6,477 million achieved during 2015-16, registering an increase of Rs 7,997 million or 123%. Similarly, the amount (other than the ones pointed out above) deposited into the treasury by the delinquent tax payers as a consequence of intervention / detection of the Directorate General rose to Rs 280 million as against the recovery of just Rs 18 million on this front during the previous financial year, indicating an improvement of Rs 262 million.
Break-up of data revealed that the value of the seized goods was Rs 8,111 million in 2016-17 against Rs 5,602 million in 2015-16, reflecting an increase of 45 percent. The evasion of duties and taxes detected of Rs 6,363 million against Rs 875 million (627 percent increase) and other recoveries amounted to Rs 280 million in 2016-17 against Rs 875 million.
Known, as well as lesser known, routes of smuggling were choked all over the country and unprecedented cases of seizure of smuggled goods were affected during the year. Similarly, huge quantities of goods smuggled into the country under the garb of import were seized at various customs stations and cases of evasion of duty/taxes to the tune of billions of rupees in relation to imported goods were detected.
Brief details of some of the mega anti-smuggling and anti-evasion cases detected during the period revealed a racket involved in importing (unlawfully) kerosene oil by way of mis-declaring it white spirit (in connivance with HEJ lab and customs staff) and supplying the same to petrol pumps for mixing it (obviously illegally) with diesel and petrol. HDIP confirmed it to be kerosene oil. As much as, 10,000 MTs of kerosene oil, valuing Rs 479 million, imported under the guise of white spirit, was seized. Value of the previously cleared kerosene oil is Rs 1700 million. FIRs against six unscrupulous importers were lodged. Investigation is in progress. The value of seized goods/evaded amount detected is Rs 2,179 million.
Another mega case involving Rs 700 million revealed that six Lahore-based importers (fake addresses) were discovered to be importing (actually smuggling) banned Indian origin Greig/Grey cloth by mis-declaring its origin as China. The offence was established through overseas investigations. The importers-cum-smugglers failed to establish either money trail (that is, transfer of money to the purported/claimed Chinese manufacturers/suppliers) or shipment trail (that is, shipment of claimed consignments from China to Pakistan). Actually, the banned cloth was transported to Dubai from India in the first place and then shipped to Lahore via Karachi. As much as 58.5 million meters of banned Indian origin Greig/ Grey cloth valuing Rs 700 million was found to have been smuggled into Pakistan in connivance with officers/officials of customs, playing havoc with, and forcing virtual closure of, grey-cloth manufacturing industry (looms) of Faisalabad. The FIRs were lodged against all concerned. Investigation is in progress.
Alarming extent of under invoicing in import of surveying equipment by trading company of Lahore was detected. Actual export documents from the supplier in Hong Kong were obtained. An amount of Rs 100 million was found to have been evaded in duty/ taxes, on the goods valuing Rs 307 million. An FIR was lodged and court proceedings are under way.
Huge under-invoicing was detected on the import of poultry vaccines and medicines resulting in evasion of duty/taxes to the tune of Rs 160 million by M/s Marush International, Lahore. Value of the seized goods was Rs 541 million. An FIR was lodged against the offending importer and investigations are under way.
Another mega case revealed that a Lahore-based importer had imported water purification filters from USA on grossly under-invoiced value and cleared from Karachi Customs. Evasion of duty/taxes of Rs 139 million was established with the help of original export documents obtained from US customs. Office of the fraudulent importer, in Lahore, was also raided by Customs Intelligence and corroborative evidence was recovered. An FIR was lodged, arrests were made and court proceedings are in progress.
Sources said that a car company of Lahore was discovered to have suppressed import value of components and subcomponents imported by them, by way of not including the royalty fee in the import value. The case is under adjudication with Customs Appellate Tribunal, Lahore, and the amount of duty/taxes evaded works out to Rs 2478 million.
Huge scam of importing and clearing high-end consumer goods like cloth and cosmetics as iron & steel scrap through Port Qasim Collectorate, with active connivance of Customs hierarchy posted there, was detected. Four containers cleared by Port Qasim Customs were seized by Customs Intelligence. Cloth (3 containers), Cosmetics & Auto Parts (1 container) were seized. An FIR against all concerned including 4 customs officers was lodged and court proceedings are under way. Previously, the same racket had cleared 120 containers from West Wharf, Karachi and Port Qasim, Karachi. The UAE Customs have been approached for obtaining details of the goods exported from UAE through 120 containers (previously cleared from Port Qasim as iron & steel scrap). Sensational revelations are expected once response from UAE Customs is received. The Directorate General is following the issue vigorously.
According to sources, tax fraud amounting to Rs 1612 million was detected against a telecom company of Rawalpindi by Customs Intelligence on account of misclassification of imported goods and gross under invoicing thereof. The case is under adjudication with the Collector of Customs (Adjudication), Islamabad.
Even more significant, and of historical proportions, achievement of the Directorate General was initiation of proceedings under the Anti-Money Laundering Act, 2010 against quite a few importers who were detected to have sent huge sums of money abroad through illegal channels of transmission. An amount exceeding US $ 30 million is under investigation and assistance from a number of countries has been sought, as well as obtained. It is a matter of great pride for the Directorate General that it has outperformed, by a long distance, all other agencies notified under the AML Act, 2010 which are FIA, NAB, SBP and I&I-IR.
In addition to the performance quantified above, the Directorate General contributed significantly towards revenue collection efforts of Model Customs Collectorates (MCCs) throughout the country. The deterrence generated by the strong, unflinching and sustained anti-smuggling and anti-evasion drive of the Directorate General not only resulted in routing of the smuggling prone goods to channels of legal import but also plugged avenues of evasion in the import regime to a great extent which contributed significantly towards achievement of the revenue target assigned to the Customs Wing of FBR. The above-referred invisible and indirect performance of the Directorate General needs to be considered as important as its visible and quantifiable performance.
It may, however, be worthwhile to place on record that bulk of the above-stated performance took place during the period from October, 2016 to June, 2017: the anti-smuggling and anti-evasion performance of the Directorate General during the period July-September, 2016 was just Rs 826 million and Rs 82 million respectively, indicating a decrease of 45% and 37% respectively compared to the performance of the corresponding period of the previous financial year.
The Directorate General is in the process of evolving even more effective strategy to further enhance its performance in all spheres of its mandate during 2017-18.
Copyright Business Recorder, 2017