Frivolous efforts by the tax departments to tap revenue leakages have given carte blanche to importers and manufacturers of edible oil and ghee to manipulate tax procedures to earn undue profits, it was learnt on Tuesday. According to sources, the tax departments are showing indifference to take legal action against importers and manufacturers of edible oil and ghee reportedly involved in billions of rupees taxes evasion.
They said that importers were allowed through SRO-24/2006 to pay Re 1 per kg as federal excise duty (FED) on sales tax (ST) mode, which would be considered as final tax liability. They said the aforesaid SRO was not only facilitating the importers to pay off their tax liability at the time of import but also helping tax officials to collect exact amount in this connection.
However, the importers are exploiting the aforesaid SRO by reducing their imports to minimise advance tax and brought local oil without paying sales tax, which is taxable in accordance with the Sales Tax Act 1990, to meet their industrial requirements. At the moment, the importers do not include the local purchases in their tax returns but also charging sales tax on the sales of by-products of edible oil without depositing the same in the national kitty, which cost billions of rupees to the government so far, they said.
Official sources expressed cognisance in this regard, saying that the tax department had received several complaints against the importers of edible oil. They said the complainants have accused the importers of selling untreated oil to the unregistered units, which is not only injurious for health but also creating adverse impact at national treasury. Keeping this in view, the tax department in this regard has sent a report to the authority concerned, asking to grant permission for further proceeding against them.