In a most questionable manner the Custom Intelligence officials have claimed that they have recovered Rs221.7 million tax from Oil and Gas Development Company (OGDCL), the largest state-owned gas utility and the biggest contributor to the national exchequer. It is quite surprising that the Custom Intelligence is taking pride in making recovery of tax from the OGDCL, which is the largest taxpayer state entity. The government holds 85% shares of the company which contributed Rs160 billion to the national exchequer in the last fiscal year.
After digging out the facts and motives behind the story, it transpired that the OGDCL procures seamless pipes for its drilling operations on concessionary custom duty allowed to it by the government. However, the Federal Bureau of Revenue (FBR) introduced a new custom general order (CGO) on February 2017 raising the custom duty from 5 per cent to 9 per cent for seamless pipes being manufactured in the Pakistan.
The company for which the FBR has issued the CGO 02/2017 possesses extremely limited capacity to manufacture the seamless pipes and was not able to supply the pipes to OGDCL in the past and was reportedly identified for blacklisting due to default in performance and misrepresentation. The CGO 02/2017 issued by the FBR was designed to give favour to the defaulting company just one company namely Huffaz Seamless Pipes which had been on the National Accountability Bureau (NAB) radar for obtaining similar questionable benefits from FBR in the past.
This is being suspected that the whole exercise of tax recovery is being trumped up at the behest of elements with vested interests which has sent a very wrong message to the corporate sector apparently to appease a private party and to show their “performance” at the cost of national interest.