Food Company Caught Allegedly Under-Invoicing Imports Worth Millions

Customs Intelligence has filed a First Information Report (FIR) against the owner of the leading food company, M/s Food Links International, and his clearing agent, M/s Danish International Karachi, alleging their involvement in under-invoicing related to the import of ‘Vegetable Oil and its Products

Sources told Propakistani that the directorate of Intelligence and Investigation Customs Karachi has lodged an FIR against owners of M/s Food Links International Shahid Huda and Muhammad Manaf on allegations of causing losses to government revenue by submitting fake and forged invoices as well as declaring 59 percent less values of imported consignments.

Sources said that importers with the connivance of clearing agents were allegedly causing revenue loss to the government on multiple fronts including under-invoicing, and exemption as manufacturers.

The importer grossly undervalued imported “Vegetable Oil and its Products” values whereas the data provided by Pakistan Vanaspati Manufacturers Association of Pakistan was much higher.

Meanwhile, M/s PT Smart Tbk Indonesia had issued actual invoices in the name of importer M/s Food Links International Karachi but the importer with the connivance of his clearing agent M/s Danish International Karachi at the import stage had allegedly submitted fake and forged invoices, depicting lower values than actual which were issued by the notify party M.s Eximco trading house LLC, Sharjah Dubai and field Good Declaration (GDs) on under invoices and lesser values instead of declaring actual as per actual invoices from M/s PT. Smart Tbk Indonesia reflects higher values.

It has been established beyond any shadow of a doubt that the importer in active connivance with his clearing agent has allegedly submitted fake and forged invoices in the Weboc system of lesser values of $175,155.40 which is less by 59.1 percent than the actual values and by claiming inadmissible exemptions of value additional sales tax and regulatory duty and thus had been succeed to evade Rs. 64.11 million government duty and taxes.

Sources said that M/s Food Links International is not a manufacturer but sells its imported goods in the local market instead of consuming the same for their in-house consumption which led to a claim of inadmissible exemption of value additional sales tax which is available to importer cum manufacturers only who consume the imported raw material for their in house consumption.

The importer was claiming an inadmissible exemption of value additional sales tax at the rate of zero percent which is otherwise leviable at 3 percent on commercial imports and this concession is only available to importers cum manufacturers for import of raw material and intermediately goods for their in house consumption to produce finished goods.

Sources said the team of Customs Intelligence had also visited the manufacturing premises of the importer which revealed that the manufacturing unit was not there; instead, this was a residence apartment for the last four years.

Hence evasion of additional sales tax and incidental taxes of Rs. 44.9 million has been avaliabled by importer on 79 GDs. Furthermore, the importer had also claimed inadmissible exemption of RD on 4 consignments which are otherwise admissible to registered manufacturers of goods and the confectionery industry. This resulted in evasion of duty and taxes to the tune of Rs. 7.7 million.

The document states that the importer had also evaded the duties and taxes worth Rs. 275 million in previous cleared under invoiced consignments which are under investigation and the collectorate is recovering more fake invoices through the Pakistan Embassy Indonesia.