The Federal Board of Revenue (FBR) is facing serious problems in the implementation of one of their major reform projects, the Post Clearance Audit (PCA) of importers in Karachi and Lahore. Sources told Business Recorder on Friday that there are no chances that the PCA project will function. It was slated to be a major reform initiative on the customs side.
It was decided to implement the pilot project of PCA in Karachi, for which importers and customs clearing agents would be picked under the newly devised risk-parameters. The board had appointed some officials for the PCA from time to time, but there have been no further developments. Additionally, the project has not begun operations for the last few months for different reasons.
Interestingly when full-fledged powers were extended to the Project Director PCA, there was no legal backing available to this new organisation in the Customs Act. To provide legal backing to the DG PCA, Section 3DD was introduced into Customs Act, 1969 in budget 2008-2009. In the Customs Act 1969, there is no provision for constituting a Directorate General of Post Clearance Audit.
It was imperative to insert a new section into the Customs Act 1969 for this post to be established and to cater to the issues of PCA in the regime of Customs' risk based computerised clearance system. A few months back, the issue was raised when some customs officials objected the powers and jurisdiction of its project director.
It was alleged that certain officials violated the rules and regulations to run their own organisation in the name of PCA. The Finance Act 2007 was also amended in the last budget to ensure that the Customs Department would operate the project so that there was no need to set up a separate organisation for this. Contrary to the board-in-council decisions, the project director has created aparallel PCA organisation, sources say.
The PCA is of the key initiatives under reforms for carrying out audit of imports and customs clearing agents under a computerised system. It seemed that the PCA would not become operational even at the initial stage.
At initial stages of the development of a structure for PCA function, a full-fledged organisation for the PCA was proposed. A committee, constituted by the then FBR Chairman consisted of the Member (Customs), Member (HRM) and Member (Admin) and examined this proposal in detail. The committee decided that there was no need for a parallel nation-wide independent organisation for PCA, saying that rather PCA, being a part of customs operations, should work under Member (Customs) within the Collectorates.
In view of massive volume of anticipated PCA work in Karachi, it was agreed that a collector supported by other officers and staff would handle the PCA work at Karachi. In rest of the country, PCA units were to be part of the reformed Collectorates and would work under the collectors. This position was then approved by the board-in-council and thus is fully reflected in the revised program of the customs department, available on FBR website.
Since the development work to operationlize the PCA has been largely accomplished and PACCS is only operative at ports of Karachi, three audit teams comprising officers who had received training for PCA work would be constituted by Chief Collector (South).
About the location of PCA head office, the FBR had agreed that since the pilot project is being launched at Karachi, the central office should also be located temporarily under Chief Collector (South) at Karachi. Ultimately the central office would be located in Islamabad, once the PACCS rolls out countrywide, sources added.
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