ISLAMABAD: The Auditor General of Pakistan (AGP) has strongly recommended the Federal Board of Revenue (FBR) to disallow importers from green channel facility, who are availing exemptions and concessions at the import stage.

According to the AGP special study report on effectiveness of concessionary regime (2019-20), under SRO1125(I)/2011, the benefit of this notification shall be available to such registered persons who appear on the active taxpayers list (ATL) on the website of the FBR.

The AGP has expressed serious concern over the lack of coordination between the Customs and Inland Revenue Service (IRS) system to automatically ascertain status of importers, exporters etc for granting exemptions under the concessionary regime.

The AGP has unearthed massive revenue loss due to inadmissible exemption of sales tax granted to blacklisted or suspected units under SRO1125(I)/2011.

During the study of the concessionary regime, it was observed that certain importers imported goods under SRO1125(I)/2011 by availing exemption of sales tax, value addition tax, and paid income tax at the reduced rates.

Audit is of the view that as per the FBR's online verification portal, the importers were blacklisted/suspended and the exemptions given was inadmissible in the light of the conditions of the SRO1125(I)/2011.

The special study revealed that the FBR (Customs) was not able to effectively control misuse of concessionary SROs.

Moreover, certain matters involving internal control and non-compliance with the government rules and regulations were also found.

Similarly, inadmissible exemptions/concessions were given on commercial imports of finished fabrics and on sub-components and components imported by the vendors of auto sector, the AGP added.

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