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Customs authorities start preparing ONO in Rs 772m Q-Mobile tax evasion case

Customs authorities start preparing ONO in Rs 772m Q-Mobile tax evasion case

KARACHI: The adjudication authority of Pakistan Customs has started to prepare final Order-in-Original (ONO) in tax evasion case of Rs 772 million by Q-Mobile and its authorised dealers New Allied Electronics and Digicom (Pvt) Limited, it is learnt.

The sources informed Customs Today that Collector of Customs Adjudication-I Dr Farid Iqbal Qureshi after the last hearing of the case which was conducted on 11 December had not announced any further date of hearing and decided to issue final ONO on merit.

The sources further revealed the collector of Customs Adjudication-I was studying the para-wise comments into the case thoroughly and would issue the final ONO in January 2015.

The tax evasion case against Q-Mobile surfaced in August 2014 in which the MCC-Multan in its contravention report stated that the cellular company Q-Mobile was involved in tax evasion of Rs 772million in import of around 2.4 million cellular phones. Six hearings were conducted which were held on 22 September, 13 October, 27 October, 13 November, 6 December and 11 December in the Customs Adjudication-I Collectorate.

The Multan MCC in its contravention report on 26 August stated that Q-Mobile and its authorised dealers Digicom (Pvt) Limited and New Allied Electronics were involved in the tax evasion of Rs 772 million in terms of evading additional sales tax and customs duty by violating the SRO-460(I)/2013 in import of around 2.4 million cellular phones.

The Customs Collectorate of Adjudication-I collector in six hearings into the case has listened the viewpoints of both the respondent i.e. MCC-Multan and Q-Mobile.

Departmental representative of Q-Mobile Afzal Ahmed Bhatti appeared before the Customs Collectorate of Adjudication-I collector in all hearings of the case, while MCC-Multan Additional Collector Ghulam Mustafa and ASO Superintendent Tanveer Malik contested the case on behalf of Pakistan Customs.

In the hearings, the departmental representatives of MCC-Multan were of the view that the cellular company was paying sales tax @ Rs 250 against the import of each smart phone while other cellular companies, including Samsung, Blackberry and Nokia had been paying sales tax @ Rs 500 on import of such smart phones.

The departmental representatives of Multan MCC also said that when the screen size of smart phone has been increased to 5 inches from 4.2 inches, the Q-Mobile stopped paying sales tax @ Rs 500.

On the other hand, the departmental representative of Q-Mobile challenged the jurisdiction of Multan MCC by saying that the mobiles phones were cleared by Preventive collectorate and Multan customs could not seize those mobile phones.

The departmental representative of Q-Mobile also came up with the objection that the customs’ authorities have nothing to do with the collection of sales tax, as the issue is tackled by the Inland Revenue Services.

The sources hinted that the Customs Adjudication-I Collectorate will issue the ONO against the cellular company and will go with the viewpoint of the Multan MCC.

Under these circumstances, the legal representatives of Q-Mobile have an opportunity to move the Customs Appellate Tribunal and Sindh High Court (SHC) against the ONO which is likely to be issued against the cellular company.