FBR denies misuse of its green channel facility

Says goods different from declaration in only 13 out of 700,000 cases

ISLAMABAD: The Federal Board of Revenue (FBR) has claimed before the Supreme Court of Pakistan that its green-channel facility for clearing imported goods is not being misused to evade taxes - a stance that is disputed by its own Customs Intelligence wing.

In a report submitted to the apex court, the FBR has stated that during the past one year, about 700,000 consignments have been cleared through the green-channel facility, said an official of the FBR, who has seen the report. Out of 700,000, there were only 13 cases where the goods were different from what the importers had declared, the SC was informed.

Chief Justice of Pakistan Mian Saqib Nisar had taken notice of a complaint filed against allegedly illegal clearances through green channel to evade taxes of billions of rupees. The court had sought a report from the FBR.



However, the FBR’s Directorate General of Intelligence and Investigation-Customs has a different view of the issue.

“The Directorate General is of the firm view that the green channel facility has been mercilessly abused by some syndicate of unscrupulous importers and the possibility of connivance of a few customs officers cannot be ruled out,” stated Customs Intelligence Director General Shaukat Ali in a correspondence with the FBR headquarters.

He further wrote that the FBR ignored his recommendations of suspending some officials of the customs group, who are suspected to be involved in facilitating the misuse of green channel facility by some fraudulent importers.

It is not for the first time that the FBR has been facing allegations of involvement of officers in corrupt practices. Earlier, former prime minister Shahid Khaqan Abbasi had also taken notice of such reports.



Ali has further claimed that the FBR headquarter was not resolving the issue of jurisdiction between the Customs Intelligence and the Customs Collectorates. In his opinion, the Model Customs Collectorates of East Karachi, West Karachi, Port Qasim Karachi and Model Customs Collectorate Appraisement, Lahore, have reacted sharply against the actions taken by the Customs Intelligence against the fraudulent importers.

But the FBR headquarter officials suspected involvement of some importers in a recent campaign against the green channel facility. They claimed that an importer, who also owns a tabloid, was behind this malicious campaign after the FBR customs found his firm involved in declaring the value of goods to evade taxes.  The FBR has begun the audit of this firm, despite requests from the owner for a ‘compromise’, said FBR officials working in the headquarters.

The difference of opinion between the FBR headquarters and its Customs Intelligence indicates serious problems. The FBR headquarters’ stance suggests that the directorate of the Customs Intelligence is being used by those importers who are facing audit.

The FBR headquarter officials claimed that Customs Risk Management System was working perfectly without human intervention. They argued that the Web-Based Customs Clearance System (WeBOC) was an advanced tool to check mis-declaration of goods.



Under the Customs Risk Management System (CRMS), the imported goods are processed under the categories of red, yellow and green channel facilities. The goods declarations, involving Duty and Tax Remission for Export (DTRE) scheme, manufacturing bond, temporary import-and export-oriented units, would have to be passed through checks of red-channel facility. The customs clearance cases involving royalty or transfer pricing disputes are also processed under the red channel.

All the consignments of embassies or holders of Free Tax Numbers (FTNs) are processed under the green-channel facility. All the items involving huge revenue are processed under yellow channel, according to the officials.

A small percentage of green channel clearances consignments are also picked up randomly by the system for examination and one out of every five consignments are subject to post-clearance verification, according to the officials. They claimed that the parameters for granting red, yellow and green channels to importers are defined by an Overview and Review Committee of Customs Risk-Management System (CRMS).

But in its letter, Customs Intelligence DG claimed that his directorate gave effect to eleven cases of seizure of goods valuing Rs3.5 billion from October 2016 to May 2018, in addition to detection of ten contravention cases involving goods valuing Rs308.7 million.

The FBR headquarter is of the view that the cases detected by the Customs Intelligence were only 0.002% of the total goods cleared from the green channel in one year. They said that against the global standards of clearing 97% of the goods through green channel, Pakistan is currently allowing only 47% of the total imported goods through this hassle free facility.

The writer is a staff correspondent.

 

 

Published in The Express Tribune, June 25^th, 2018.

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