Under-invoicing, over-invoicing, mis-declaration: Pakistan Customs intensifies operation against importers

ISLAMABAD: The Pakistan Customs has intensified its operation against the importers responsible for under-invoicing, over-invoicing and mis-declaration.

The Customs has unearthed a big case of under-invoicing whereby certain importers imported TANG’ Brand Drinking Powder at exorbitantly low value @US$ 0.4 KG. The Pakistan Customs obtained the actual export documents of such consignments from the UAE Customs, which reflected the actual value at $2.39/KG. The evaded amounts of duty/taxes are to the tune of Rs330 million.

During preliminary investigations, it transpired that the importers established shell companies in Dubai, which were used for the transfer of amounts of the under-invoiced goods while the remaining amounts were transferred through Hawala/Hundi. The Pakistan Customs has initiated serious action against such importers.

A proactive/preventive mechanism has been put in place to effectively control under-invoicing/over invoicing and mis-declaration (at the import stage) keeping in view the fact that these phenomena not only cause revenue hemorrhage and loss to domestic industries, but also the same are instrumental source of trade-based money laundering and terrorism financing. Such malpractices are now treated as Fiscal Fraud under Customs Act, 1969 of Pakistan.

It is pertinent to state that the Pakistan Customs is actively obtaining export documents, to avert under-invoicing, from major trading partners of Pakistan including China, UAE, Singapore, South Korea, and Hong Kong.