The Collectorate of Customs (Enforcement), Karachi, has detected an alleged large-scale misuse of the Export Facilitation Scheme (EFS) by importers, prompting the launch of an inquiry against senior customs officials, including an Additional Collector, a Deputy Collector of the Collectorate of Customs Appraisement-West, Karachi, it was reported on Friday.
According to a letter from the Collector of Customs, Collectorate of Customs (Enforcement), Karachi, to the Federal Board of Revenue (FBR), an incident report regarding misuse of EFS has been compiled, indicating the possible role of concerned officials.
Details of the issue revealed that the consignments were declared to contain scrap items, including compressor scrap, aluminum condenser scrap, iron and steel remeltable scrap, and recoverable copper.
However, based on credible information regarding misdeclaration of description, evasion of duty and taxes, and attempted clearance of banned goods under the garb of the EFS facility, the said consignments were blocked at the terminal, namely AICT. All four consignments had already been cleared by the Collectorate of Customs (Appraisement-West), Karachi, and were at the gate-out stage.
The consignments were subsequently de-sealed and physically examined. During examination, the cargo was found to primarily comprise slightly used/almost new window air conditioners, portable air conditioners, and dehumidifiers of Midea brand and Thailand origin, along with a small quantity of compressor scrap, instead of the declared scrap items.
The Export Facilitation Scheme (EFS) is a government initiative aimed at promoting exports by allowing manufacturers and exporters to import raw materials, components and other industrial inputs without paying customs duties and taxes upfront, provided the imported goods are used to produce items for export.
The scheme is intended to lower production costs and improve the competitiveness of Pakistani exports.
However, because it offers tax and duty exemptions, customs officials say it can be vulnerable to abuse if importers falsely declare goods or attempt to bring in restricted or commercial items under the cover of the scheme to evade taxes or bypass import restrictions.
