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FBR Orders Big OMCs to Stop Selling Smuggled Goods at Their Retail Outlets

The Federal Board of Revenue (FBR) has ordered four Oil Marketing Companies (OMCs) to stop the sale of smuggled goods, including cigarettes, at their retail outlets.

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In case the OMCs fail to comply with the order, the FBR will launch legal action, including heavy financial penalty and imprisonment, against their senior officials.

According to details, FBR’s Customs Department issued the directives over the weekend after it found that retail outlets of Pakistan State Oil (PSO), Shell, Hascol Petroleum, and Total Parco were involved in the sale of smuggled goods.

In an official letter, the Collectorate of Customs Enforcement warned these OMCs that their senior management will be fined with a penalty equal to 1000% of the value of smuggled goods being sold at their retail outlets.

If the value of the smuggled goods found at their retail outlets exceeded Rs. 300,000, all members of the senior management of the OMCs will be sentenced to 6 years in prison

The orders from the Customs Department come amid an unprecedented increase in smuggling activities in the country despite confiscating smuggled goods of more than Rs. 58 billion in the FY 2020-21, an increase of 46% from the FY 2019-20 when smuggled goods worth Rs. 36 billion were seized.

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This is the first time the FBR has invoked the legal powers which allow it to take administrative measures and mete out strict punishments to OMCs involved in the trading of smuggled goods.

In September 2019, the FBR mulled over launching a massive operation to raid markets all over the country to seize smuggled goods. However, the plan was shelved due to a lack of legal cover and a severe countrywide backlash from the retailers.

As a result, the parliament introduced an amendment to Section 2(s) of the Customs Act 1969 to authorize the FBR to launch such actions and bring retail outlets involved in the sale of smuggled goods under the law.

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