The National Board of Revenue has instructed the customs houses for imposing proper and reasonable amount of preventive penalty to check duty evasion through misdeclaration in imports and exports, officials said.
They said that the revenue board found that many customs officials imposed penalty at lower rates which failed to prevent repetition of such misdeclaration causing revenue losses of the government.
Customs wing of the revenue board also found some irregularities in imposition of penalty for violation of customs matters including false declaration related to the rate of customs duty, under-invoicing, over-invoicing, quantity of products, nature of products, and origin of products in import-export activities.
Traders used to provide false declaration to the customs authorities to evade duties and other taxes and even to launder money from the country.
According to the findings of the revenue board, customs officials, in many cases, do not impose penalty at preventive rate for the violation of customs act.
Imposition of penalty for same types of offence also varies for person to person and company to company causing discrimination for businesses, it was found.
Even customs officials do not impose penalty at rational rate for repetition of offences by a trader, it said.
Such flexibility in imposing penalty cannot play proper role in preventing recurrence of customs related offences costing the government in revenue losses, officials said.
According to the Article 156 of the Customs Act-1969, customs officials can impose a penalty, not exceeding three times the value of the goods, for offences under the Section 32 of the same act related to untrue statement.
For other offences, customs officials may impose penalty up to 10 times of the value of goods or the amount of applicable duty.
Customs officials may also confiscate the goods for such offences.
In this context, the customs wing of the revenue board has recently sent a letter to all commissioners of customs houses and customs, VAT and excise Commissionaretes in the country to be more cautious while imposing the penalty, a high official told New Age on Tuesday.
‘It is important to impose penalty at reasonable and preventive rate to prevent customs offences, particularly related to misdeclaration,’ the letter stated.
It is also important to impose penalty at same or similar rates for analogous offences to ensure justice for all traders, it said.
The revenue board also instructed the commissioners to find out proper course of actions to remove these irregularities in applying the provision of the customs act.
Customs officials working at customs houses and other stations, however, said that imposition of penalty for such offences was solely discretionary power of the customs officials and they applied the power considering the nature and intensity of a particular case.
So, it will be tough to impose penalty at same rate for all cases, they said.
Source: New Age