Customs empowered to impose sales tax on misdeclared baggage

ISLAMABAD (December 24 2002) : The Central Board Revenue (CBR) has given the power to custom authorities at ports/airports to tighten the grip on businessmen/traders allegedly involved in incorrect declaration of baggage under Sales Tax Act, 1990, to minimise the incidence of this practice.

The goods confiscated by the anti-smuggling agencies are also liable to strict penal action under the sales tax laws, says a directive issued to the custom collectorates.

The custom officials have also been directed by the sales tax department to also apply the required penal provision of Sales Tax Act while imposing penalties and drafting contravention reports against the importers/carriers.

The custom officials dealing with the baggage clearance procedure have the authority to impose heavy penalties and issue show-cause notices under section 33, read with section 36 of the Sales Tax Act, on importers declaring incorrect baggage.

Official sources told Business Recorder on Monday that sales tax is leviable on goods imported under baggage, subject to payment of custom duty.

The law was there but was never exercised by the custom authorities.

The customs should not restrict itself only to the custom laws, but penal provisions of the Sales Tax Act should also be invoked in case any incorrect declaration is unearthed.

The collectorates of customs dealing with clearance of baggage or engaged in anti-smuggling activities are required to implement the provisions of the Sales Tax Act, 1990 in true spirit and recover sales tax on imported baggage, or confiscated goods, to discourage smuggling into the country.

Sources said that deliberate incorrect declarations at import stage will be liable to penal action under the provisions of section 33 and section 36 of the Sales Tax Act, 1990.

Furthermore, all officials responsible for preparing contravention reports and show-cause notices would invoke penal clauses of Sales Tax Act, 1990 for imposition of penalty.

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