Customs Intelligence uncovers tax evasion by yarn importers

ISLAMABAD: The Directorate of Customs Intelligence and Investigation Karachi has alerted the authorities about a tax evasion by some yarn importers, who are misdeclaring the denier of the imported yarn to pay lower duties and taxes.

According to sources, the directorate has received credible information that the importers are misusing the export facilitation scheme and the valuation ruling to evade the applicable duties and taxes on the yarn for home consumption.

The directorate has asked the headquarters to circulate the information to all field formations and increase the vigilance on the consignments of yarn, especially those with declared values under the lower lab of the respective valuation ruling.

The sources also revealed that the directorate has discovered that the industrial importers of yarn are entitled for a cumulative benefit of 7.5% of duties and taxes over commercial importers, as they are exempted from paying 3% additional sales tax, 2% additional customs duty, and 1% income tax.

Despite ban, Indian yarn finds its way into Pakistan

However, some of the industrial importers are allegedly selling the imported yarn commercially, resulting in a huge loss to the national exchequer.

The directorate is further investigating the matter and has advised the field formations to ensure that the import of yarn by the industrial importers is in accordance with their manufacturing capacity.

The annual demand of imported yarn for the country is more than 0.8 million tons, valuing Rs375 billion.