FBR advises Customs to curb misuse of FTA with China

KARACHI: The apex tax authority has advised Pakistan Customs to check the misuse of free trade agreement (FTA) with China after it uncovered tax frauds by a number of importers who availed the benefit for the import of goods from other countries, an official said on Monday.

  “The FBR (Federal Board of Revenue) has issued an ‘alert’, advising the Customs formations to check the misuse of the FTA with China as goods having other origins are being imported under the FTA through manipulation in documents,” the official said.“Pakistan Customs detected several consignments of Indian origin and UAE origin goods, which were imported and cleared through mis-declaring the port of shipment as China instead of UAE.”

Sources said the department has already booked many importers for this fraud. The accused persons imported textile fabric and lubricating oil consignments with bills of lading bearing the name of the shippers and port of loading in China.

The investigations revealed that the importers with the active connivance of freight forwarder and Customs’ clearing agents were, in fact, importing and clearing non-China origin goods by mis-declaring the information related to the shipper’s name, port of loading. 

“It has been established beyond any shadow of doubt that the consignments were actually imported from Dubai instead of China as shown in Master bills of lading,” the official said. “Hence, freight forwarder/sub-agent in connivance with importers and clearing agents deliberately mis-declared the port of shipment of the goods as China and shipper name to hoodwink the customs authorities with the ulterior motive.” 

The official said FBR advised the collectorates to conduct scrutiny of imports to sort out suspicious imported consignments. “A team is likely to be sent to Dubai to coordinate with the Dubai customs in this regard,” said the official.

In 2007, Pakistan and China signed the FTA to reciprocally give market access to the products in their markets under certain tax concessions.

Trade analysts said the government has now decided to re-evaluate its all free trade agreements with all the countries, especially China. 

The analysts said Pak-China FTA has not been much instrumental in reducing the trade deficit of Pakistan, while the floods of Chinese goods into the country pushed the local products out of the market.