FBR swoops on smuggled foreign cigarettes

RECORDER REPORT

ISLAMABAD: The supply of expensive smuggled cigarette brands is likely to dry up for upper echelons of the federal capital, including foreigners and bureaucrats, after the Federal Bureau of Revenue (FBR) moved to check the influx of non-duty paid cigarettes.

The Inland Revenue’s Directorate-General of Intelligence and Investigation is learnt to have formed a number of mobile teams to survey all markets of Islamabad and Rawalpindi.

Sources said that Islamabad was the hub of policymakers, but the consumption of expensive cigarette brands had become a status symbol for the federal capital’s elite. After the scope of an earlier exercise to check the availability of non-duty paid cigarettes limited to local cigarette manufacturers was broadened to include smuggled foreign cigarettes, the Inland Revenue’s directorate of intelligence would be keeping a close watch over the consumption and the quantity of such cigarettes.

FBR’s mobile teams are learnt to have so far visited Jinnah Super Market, Super Market, Blue Area, Kohsar Market, Karachi Company, commercial areas of F-10 and F-11 sectors, major retail outlets and other markets located in the federal capital.

One of the mobile teams, headed by senior intelligence officer Khaild Ahmed Khan, found that packets of smuggled cigarettes neither had retail price printed on them or health warnings.

Cigarette importers meet both conditions, sources said.

The mobile team also distributed educational material to owners of stores, shops and retail outlets, besides issuing warnings to remove their stocks of foreign non-duty paid smuggled cigarettes within the next week after which raids would be conducted to verify the legal status of their stocks. Action, including seizures, would be taken against violators, they were warned.

The exercise appeared to be mainly focussed against a smuggled brand from Korea which is abundantly available in the market. This brand is hurting the sale of different cigarettes manufactured by two of the country’s leading multinational companies.

Inland Revenue’s intelligence officials were also found checking the supply chain of non-duty paid smuggled cigarettes right from Nankari Bazar in Rawalpindi after a stockist was found to have been involved in the supply of non-duty paid smuggled cigarettes to retail outlets in Islamabad.

Subsequently, stockists are learnt to have temporarily stopped the supply of such cigarettes, drying up the inventories of retail sellers. Cigarette sellers were found to be reluctant to sell such smuggled cigarettes.

The exercise is aimed at restricting the supply of such non-duty paid cigarettes, making them far more expensive than local brands.

Mobile teams, also formed in Peshawar, Islamabad, Lahore, Faisalabad and Karachi, have so far seized six million non-duty paid and locally-manufactured cigarette sticks.

The number of seizures/detention: In 10 cases, over 50,000 non-duty paid cigarettes foreign sticks. Over 27,000 kilograms of un-manufactured tobacco has been seized in three major cases.

The directorate had also so far sealed two un-authorised warehouses of un-manufactured tobacco.  The agency also impounded the record of a sole distributor, which, officials said, showed evasion of duty/taxes of more than Rs100 million. The directorate has detected three cases of illegal import of raw material (cigarette paper and acetate). Another case showed an evasion of Rs120 million.