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Post Clearance Audit recovers Rs71.60m on account of DTRE from M/s Tetra Pak (Pakistan) Ltd

Post Clearance Audit recovers Rs71.60m on account of DTRE from M/s Tetra Pak (Pakistan) Ltd

LAHORE: Directorate of Post Clearance Audit (PCA), Lahore has recovered Rs 71.60 million on account of duty and tax evasion from Duty & Tax Remission for Export (DTRE) user, , official documents disclosed.

The document showed that the company engaged in manufacturing of packing material for dairy and juice industries obtained DTRE approval no KCUS/262/20072016 dated 20-07-2016 but raw material imported for onward export was found under-consumed.

Accordingly on the directions of then PCA Director Asif Mahmood Jah, DTRE audit team comprising two audit officers including Arshad Malik and Muhammad Jamil under the supervision of Additional Director Mrs Saadia Munib was constituted for conducting the audit of said DTRE approval, it was revealed.

The desk audit of DTRE approval was conducted and record was requisitioned from the DTRE user for detailed DTRE audit under Rule 307E of DTRE Rules notified vide SRO 450(I)/2001 dated 18.06.2001.

M/s. Tetra Pak (Pakistan) Limited, Lahore, obtained DTRE approval no.  KCUS/262/200072016 dated 20-07-2016 from MCC Lahore to import different types of paper and paperboard, coated with Kaolin clay coated board, aluminum foil plain in rolls (6.3 micron thickness tolerance) rolled, but not further worked, aluminum foil plain in rolls (9 micron thickness tolerance), polyethylene having a specific gravity of less than 0.94 (polymers of ethylene polyethylene LDPE), polyethylene having a specific gravity of less than 0.94 (polymers of ethylene polyethylene LDPE), and polyethylene having a specific gravity of less than 0.94 polymers of ethylene resin (adhesive polymer) for production of tetra pack packaging material printed and pre-creased in reels under DTRE scheme, the documents stated.

The documents explained that during audit reconciliation statement submitted under Rule 307D of DTRE Rules ibid by DTRE user was compared with imports of raw material and subsequent consumption of exported goods. The audit team found that raw materials of the duty and tax free imported input goods had not been consumed in the production of exported goods.

A drastic difference was detected in consumption of imported goods versus exports in the declaration of the DTRE user. A total quantity of raw material 18,965,776 kg was imported but only 17,955,769kg was consumed in the manufacturing of the exported goods and hence a quantity of 1,010,007kg was left unconsumed.

Accordingly, authorized representative of the company was called for meeting and discussed the whole situation with him, the documents said, adding that he sought time to look into the matter and after a lapse of 15 days, the company agreed to the audit observation and consented to pay the differential amount of duty/taxes amounting to Rs62,958,730 leviable on unconsumed stock.  Consequently, the total amount of Rs71,609,608 has been recovered from the DTRE user including default surcharge amounting to Rs8,550,878 and penalty of Rs1,00,000, it concluded.