The Federal Board of Revenue has called an explanation from Model Customs Collectorate (MCC) Port Qasim, Karachi that why customs duty collection of zero percent has been shown against the import of high speed diesel (HSD) costing Rs 1.7 billion during first quarter (July-September) 2012-2013.
In this connection, the FBR here on Saturday directed the Collector of Customs MCC Port Qasim, Karachi to clarify certain issues while fixing revenue collection targets for the remaining quarters of 2012-2013. According to the FBR, Port Qasim should immediately explain that how the customs duty of zero-percent has been collected on the import of the HSD during first quarter (2012-13) when the import value of HSD cleared through the said Port was Rs 1.7 billion in this period. The HSD is subjected to 10 percent duty at the import stage. There is a discrepancy in the data submitted by the MCC Port Qasim as zero-percent duty cannot be collected against huge import of Rs 1.7 billion of HSD during July-September 2012-13, sources said.
Sources said that the FBR has further directed the MCC Port Qasim, Karachi to explain reason for assigning 40 percent growth in customs duty target in the second quarter of 2012-2013 as compared to increase of 45 percent in the dutiable import value in the first quarter of 2012-13. Sources said that the MCC Port Qasim, Karachi is one of the important Collectorate of Karachi, contributing major chuck of customs duty from imports made through Karachi. After MCC PaCCS and MCC Appraisement Karachi, it has contributed highest amount of revenue at the import stage.
The FBR has put following questions to be responded by the MCC Port Qasim, Karachi pertaining to the fixation of targets during 2012-13: Firstly, the Collectorate is applying an annual growth rate of 20 percent. What is the basis of this growth rate?
Secondly, does this growth rate include the additional revenue from Qasim International Container Terminal (QICT) which was not within the revenue jurisdiction of Port Qasim Collectorate during the 9 months of previous fiscal year? The Collector should provide a comparative statement showing the revenue (all tax heads separately) exclusively generated by QICT during current and previous fiscal year.
Thirdly, the analysis of import data of Port Qasim for first quarter indicates an increase of over 45 percent in dutiable import value as compared to last fiscal year. However, as per Collectorate's letter there is an increase of only 40 percent in the target assigned for second quarter as compared to collection during same period of last fiscal year. The Collectorate should provide quantitative reasons for lower expectation for collection of duty against the increasing trend in dutiable import value.
Fourthly, a statement of major revenue spinners of MCC Port Qasim, enclosed with Chief Collector (South)'s letter dated October 2, 2012 indicate increase in customs duty by 127%, 464% and 154% in just three items when compared to last years collection. The Collectorate is requested to provide reasons if this growth is not expected to continue during the remaining period of 2012-13.
Fifthly, in the same statement of major revenue spinners of MCC Port Qasim, duty collection from High Speed Diesel (HSD) is shown as "0". Perusal of import data of HSD from MCC Port Qasim indicates an import value of around Rs 1700 million during the first quarter of 2012-13. This position is not commensurate with the data mentioned in Collectorate's above referred statement.
Sixthly, in respect of sales tax target, the Collectorate is requested to provide basis of 20% growth assumption. Seventh, the Collectorate has mentioned "limited growth elasticity" in respect of Furnace oil, Rape seeds, CKD kits Phosphoric acid and Tea. MCC Port Qasim should provide detailed working on calculation of this elasticity.
Eight, variation in collection of duty/taxes is proportionate to the variation in dutiable I taxable import values of imported items. The Collectorate is requested to provide comparative growth in Sales Taxable import value and corresponding sales tax collected for first quarter of 2012-2013 and 2011-2012.
Ninth, similar comparative data in respect of federal excise duty (FED) and withholding tax may also be provided by the MCC Port Qasim. Tenth, based upon the revenue collections for the first quarter, total revenue of MCC Port Qasim is almost 1.5 times more than the total revenue of MCC PaCCS. However, when revenue generated through Special Administrative Measures is compared for the month of August, 2012 alone (as MCC Port Qasim failed to provide statements for the months of July and September, 2012 despite repeated reminders from the Board), the performance of MCC PaCCS is more than 500 times better than MCC Port Qasim.
In view of said issues raised by the Board, the Collectorate should submit a revised working of revenue targets, along with, and based upon, the quantitative/statistical support identified above, the FBR instructions to MCC Port Qasim added.
Comments
Comments are closed.