The Directorate General of Post-Clearance Audit (PCA), Karachi, has rejected the report of the Model Customs Collectorate (MCC) (Preventive) that the mega scam of duty-free shops in Karachi had been unearthed by the collectorate. The Directorate General of PCA Karachi informed the Federal Board of Revenue (FBR) that it had given information about 28 containers imported by duty-free shops, Karachi, were missing, and the goods were being sold in the open market.
The MCC (Preventive) Karachi, having jurisdiction over the duty-free shops, had registered an FIR against the involved persons, who deliberately sold the goods in the open market. The DG PCA Karachi has submitted an updated report to the FBR on the whole issue.
Sources told Business Recorder on Friday that DG PCA Audit had expanded the scope of investigation encompassing Duty Free Shops at Karachi. Their investigation showed that 28 containers, imported by these shops were missing and were not duly received in customs bonded warehouse of Model Customs Collectorate (Preventive) Karachi.
During further scrutiny of import record and available bonded warehouse registers of duty-free shops by the audit team of the Directorate General, it was found that out of 56 consignments imported by the subject entity during September 2009 to date, 27 consignments consisting of 28 containers were missing and were not duly received in customs bonded warehouse of Model Customs Collectorate (Preventive). The amount of duty and taxes worked out on the missing consignments is approximately Rs 100 million.
While the audit by DG PCA is still in progress, MCC (Preventive) has painted a wrong picture to the Board that the subject detection has been made by the said Collectorate, whereas the detection regarding missing containers was in fact unearthed by the audit team of Directorate General PCA.
The detection was already made at the time when the DG PCA had sought relevant record from the MCC Preventive Karachi. Sources said that when the DG PCA had sought data on this case from the Preventive Collectorate, the collectorate tried to take credit of the case. At that time, the DG PCA had unearthed the scam and MCC Preventive had not detected this case.
The number of missing containers, as intimated by MCC (Preventive) is also factually incorrect, as the same had been done without consulting the audit team of the DG PCA Karachi. As the relevant record of the subject entity has already been retrieved by the Directorate General during audit, any unilateral intervention by the MCC (Preventive) on the basis of incomplete record was likely to jeopardise the scope and results of audit being conducted by PCA.
A detailed report in the case would be submitted to the Board by the Directorate General within a week after conducting complete scrutiny and upon necessary verifications of the relevant record the DG PCA said. It is important to mention that the audit of Duty Free Shops found that containers imported by such shops had been missing for the last many days and record of such containers had not been incorporated in the database of these shops.
The missing containers contain a number of imported goods including perfumes, juices, cigarettes, suitcases and other items. The modus operandi used by the Duty Free Shops showed that the duplicate sales record had been maintained by them. The containers, which are not missing, showed that the imported goods have been actually sold in the open market, reflecting a clear case of tax fraud being committed by the Duty Free Shops in Karachi.