Outdated online system bites revenues

KARACHI: The national exchequer has suffered heavy revenue losses due to the failure of officials to update computerised system of the Pakistan Customs, WeBOC to incorporate amended rate of federal excise duty on certain items for the collection at the import stage.
Sources in Pakistan Customs on Tuesday said the rate of the federal excise duty (FED) was enhanced to nine percent from six percent on import of soft drinks, which is to be collected at the time of consignment clearance along with other duty and taxes.
However, the changes were not updated in the Web-Based One-Customs (WeBOC) and the Customs staff were unable to calculate the actual rate, resulting in revenue losses worth billions of rupees.
The sources said the Customs authorities had communicated with the FBR on the issue, explaining that in majority of the cases the duty was charged at six percent instead of leviable rate of nine percent of retail price that should be included in import value along with other duty and taxes, excluding sales tax.
The rate was amended and enhanced to nine percent from six percent in the First Schedule to the Federal Excise Act, 2005 through the Finance Act, 2013.
The Customs authorities said misdeclaration was also reported on the import of soft drinks and the same was declared under Pakistan Customs Tariff (PCT) at 2202.1090 or 2202.9000 to avoid levy of federal excise duty. The actual PCT of soft drinks for assessment of duty and taxes is 2202.1010.
The FBR has been informed that no mechanism was available in the WeBOC for determination of exciseable value or retail price of the products.
A senior official at Pakistan Customs on the condition of anonymity said the Customs examining staff was not able to detect the issue even those consignments that were marked for yellow and red channels.
The FBR has been requested to constitute an inquiry team for the issue and fix responsibilities on the officials in this case.
Recently another issue of anti-dumping duty was surfaced where the rate was not updated at WeBOC and millions of rupees were not deposited to the national kitty.