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January 15, 2015

Undervaluation of imported groundnuts detected


January 15, 2015

KARACHI: Customs Intelligence has unearthed massive undervaluation of groundnuts, which incurred huge revenue losses to the national exchequer, official sources said on Wednesday.
Customs officials said the Directorate of Intelligence and Investigation, Karachi had suggested the Customs Valuation Department to issue valuation ruling for imported groundnut for determination of duty and taxes.
The officials said the directorate intercepted around 16 containers of groundnuts in-shell and blocked six goods declaration for further proceedings.
The action was taken after the importers cleared the consignments carrying groundnuts and declared almost half of the actual value.
The consignments in the latest case were declared at $350 per metric ton, whereas the international prices are around $750 to 1000/MT. The Customs officials said that the port of existence of such containers has been identified as Nhava Sheva and Mandara Sea Ports of Gujarat, India, the officials said.
The detected evasion was on those goods, which were already cleared by the Customs collectorates in Karachi.
The sources said the consignments were cleared through green channel facility under which the consignments clearance was made without examination or assessment on self-declared prices by importers.
The sources also said such clearance might be negligence on the part of the Customs officials or sent deliberately to green channel for ‘monetary benefit’.
At present, the groundnut is assessed under Pakistan Customs Tariff (PCT) 1202.4100, attracting five percent Customs duty; sales tax at 17 percent; three percent additional sales tax and six percent advance income tax.
However, no valuation ruling is available for securing actual revenue from clearance of such food items.
The retail price of groundnut in open market is around Rs320-380 per kilogram, while the importers are declaring the goods in terms of Pakistani rupee at Rs35/kg.
Sources in the Customs said

bulk of consignments were imported during the last few months due to seasonal high demand. They said about 700MT groundnuts were imported during December 2014.
Under Section 25 of the Customs Act, 1969, a procedure has been laid down for assessing the import value of an item. Furthermore, under Section 25A, the Customs officials have been empowered to determine the valuation where ruling is not available.
The Customs Intelligence in reference sent to the Director General Customs Valuation advised it to issue valuation ruling for such goods to secure revenue in the future.
When contacted Asif Marghoob Siddiqui, director of the Customs Intelligence and Investigation, was reluctant to share details; however, he confirmed that such reference was sent to the DG Customs Valuation and was waiting for decision.

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