ISLAMABAD: The Directorate of Intelligence and Investigation, Federal Board of Revenue (FBR) has taken notice of tax evasion worth over Rs 90.652 million by printing incorrect and low price on packets of imported cigarettes.
According to credible information received by this scribe on other day from sources in Directorate of Intelligence and Investigation, FBR, Numeric Distribution Network Pvt.
Lahore was importing "Camel" brand cigarettes of Japan tobacco international 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, the sources revealed that 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.
Furthermore, under SRO 53(KE)/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.
The sources informed that the said importer had recently imported seven consignments of as many as 2,219,000 packets of cigarettes of "Camel" brand of Japan tobacco international by declaring Retail Prices in the range of Rs. 57.26 per packet to Rs. 61.53 per packet, whereas the actual Retail Prices (excluding sales tax) are in the range of Rs. 93.74 per packet to Rs. 101.8 per packet.
Since FED and ST are payable on Retail Prices inclusive of all duties, taxes and other charges, it is obvious that by printing an 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. 90.6524 million.
The Directorate has forwarded the contravention case to the Collector of Customs (Adjudication), Lahore, by violating sections 79, 80, 32(1)(2) of the Customs Act, 1969.
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