Procedure to check bogus refund claims modified

ISLAMABAD (October 04 2003): To effectively check the bogus sales tax refund/duty drawback claims by the exporters, the Central Board of Revenue (CBR) has modified the procedure to verify documents/ sales tax invoices of the export consignments, dispatched particularly to UAE and Saudi Arabia.

Official sources told Business Recorder here on Friday that the new mechanism would ensure 100 percent detection of illegal refund/rebate claims without causing any harassment of the exporters.

The procedure has been devised mutually by the custom and sales tax authorities in consultation with Custom House, Karachi.

Under the new strategy, the exporters are required to give; complete description of goods with exact counts/construction, composition, material used on the shipping documents, along with the correct H.S. Code.

Sources observed that the value of the exported goods to Mid-East countries should not be higher than the value of identical goods to Europe and USA. Otherwise, Collectorates would thoroughly examine consignments of PSF based items, especially the bed sheets exported to UAE and Saudi Arabia.

In case the value declared is higher than the EU/USA, the case should be referred to Price Control Committee (PCC) for determination of the correct value for the purposes of payment of refund/rebate.

The PCC will provide price-list of goods exported to EU or USA for use in Exports and Sales Tax Collectorates.

The sales tax refund/rebate shall be accordingly paid, on the basis of the new valuation method.

In this regard, all consignments presented for examination, within 2 hours of departure of the vessel/conveyance, shall invariably be examined by an officer not below the rank of Assistant Collector.

Moreover, the Principal Appraiser/examining staff should recheck and reconfirm the weight.

The concerned officer should have to make such endorsement on the shipping bill. The copy of weighing slip, issued by the terminal/port authorities, should be attached with the shipping bill submitted for rebate claim.

In case of discrepancy, the same should be mentioned on the shipping bill, as well as the sales tax invoice.

Samples shall be taken in each doubtful case and sent to the laboratory for testing and confirmation that the description and quantity of raw materials/inputs used is the same, as has been declared/accepted for calculating the rate of rebate.

For this purpose, the data computerised by Input Output Coefficient Organisation (IOCO), showing input/output ratios of each rebateable commodity shall be obtained from the IOCO department and handed over to the Incharge of Customs Lab, for necessary test and confirmation.

It would be ensured that the seals affixed by Customs and Security companies at the Dry Port/Customs stations, where the shipping bills/customs declarations had been processed, are intact.

In case of any doubt, regarding tempering of seals etc the consignment / containers may be re-examined in the presence of representatives of shipping agent/shipping lines/terminal or Port authorities and the findings may be conveyed to the Collector, from where the export consignment had originated, besides initiating the appropriate action, under the Customs Act, 1969.

The Sales Tax Collectorates will co-ordinate with the Exports Collectorate to compare and reconcile the total export value, prices per unit, difference in weight or quantity or description, cases of short shipments, change of vessel and all other relevant details.

To ensure that the figures of both, the Exports and Sales Tax Collectorates should match the reconciled position/computer print out and the discrepancies should clearly be marked and sent to the respective Collector of Sales Tax, Chief (STARR) and Member (Sales Tax).

Hence, the Collectorates would immediately take strict action against the exporters in cases of mis-declaration of value and illegal claim of refund and rebate, sources added.

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