KARACHI: Customs Appraisement South has temporarily suspended implementation of concessionary SRO 1125(I)/2011 for a large number of importers.
Appraisement West Collector Shahnaz Maqbool found that SRO 1125(I)/2011 was widely been misused causing loss to the national exchequer, primarily because of the confusions and contradictory provisions in the regulatory order.
The Appraisement West collector has already approached Federal Board of Revenue (FBR) seeking clarification pertaining to certain provisions of the said order to avoid misuse and leakage of revenue.
On the report of Shahnaz Maqbool, South Chief Collector Abdul Rasheed Shaikh issued an alert to all the collectorates including Appraisement East and Port Qasim to stop allowing benefit of the concessionary SRO until a clarification is received from the FBR.
Collector Shahnaz Maqbool has approached the FBR seeking clarifications pertaining to various provisions of SRO 1125(I)/2011, as the confusion created by over a dozen amendments in the SRO has left doors wide open for misuse.
Shahnaz Maqbool has taken the task to plug revenue leakage because of the misuse of concessionary regime. Sr No1 and 2 of Table I of SRO 1125(I)/2011 excludes the locally manufactured finished articles of leather and artificial leather and locally manufactured finished articles of textile and textile made ups.
However, serial No. 4 of Table II allows imported finished goods of the five value added textile sectors ready for use by the general public.
Shahnaz Maqbool said that finished goods even of the five sectors (e.g. shoes, garments, hand bags etc.) are not entitled to concessionary/reduced rate of value addition tax and income tax being excluded from the SRO.
Otherwise, exemption/concession on finished goods is not only against the spirit of SRO 1125(1)/2011, which was primarily issued to facilitate the export oriented sectors of the country, but also hampering the growth of the local manufacturing industry.