ISLAMABAD: Federal Board of Revenue (FBR) is reportedly investigating a mega under-invoicing scam showing the purported involvement of one of the new companies owned by a leading Chinese automobile corporation, well-informed official sources told Business Recorder.
The “documents” shared with the FBR, which are being probed by the authorities, indicate that to date the company appears to have imported over 400 CBU units from Shanghai China predominantly MG HS Model, their highest specification model, with declared customs value of $ 11,632 which is “absurdly low” considering the same vehicle is being sold at a price above $ 27,000 in other countries.
The under-invoicing “evidence” has also been shared with other line Ministries and agencies for a thorough probe as this is inflicting billions of rupees financial loss the national exchequer.
The documents available with FBR reveal that MG HS CBU vehicle is being sold in Australia at price of AUD 34,990 equivalent to US $ 27,200. After deducting local duty, taxes and profit for local distributor in Australia its import value cannot be less than $ 22,000.
“We have referred the case to Customs Intelligence for proper investigation of this gross violation and day light robbery on Government tax revenue,” the sources maintained.
With over 400 CBU units already imported, the company is accused of evading over Rs 1.1 billion in duty and taxes so far.
Imports from China have long been characterized by massive under-invoicing which has been admitted at the highest level by Commerce and Customs officials.
According to government's own estimates, Pakistan loses up to $ 6 billion worth of duty and taxes every year due to under-invoicing of imports despite the fact both countries are using Electronic Data Exchange facility to verify export value being declared in China for all high value items being imported into the country.
Officials are of the view that such under-invoicing can also be easily checked using declared value in other countries of the same items.
When contacted, Special Assistant to the Prime Minister on Revenue, Dr. Waqar Masood said that FBR accepts declared value of only two/ three per cent, adding that he is inquiring from the concerned authorities as to how this is happening.
Another official said that FBR is already investigating it and if under-invoicing is proved strict action will be taken against the concerned company.
Copyright Business Recorder, 2021