Corruption remains one of Pakistan’s economy’s most pressing challenges, undermining fairness and transparency. A recent case involving M/s Hoora Pharma (Pvt.) Limited in Karachi, Pakistan, highlights how customs duty exemptions can be misused, leading to significant financial losses to the state exchequer.
Background of the Case The Collectorate of Customs, Airports Karachi, received an Intelligence Alert (No. 4/RE/2024) from the Directorate of Intelligence & Investigation-Customs, Karachi. The alert indicated that M/s Hoora Pharma (Pvt.) Ltd. had potentially availed inadmissible exemptions under PCT heading 9938, leading to an approximate evasion of customs duty and taxes amounting to PKR 331.86 million.
Details of the Alleged Evasion Hoora Pharma imported various consignments of “Sutures,” claiming exemptions under the PCT heading for “Disposables” used in critical medical procedures like Cardiology, Neurovascular, Endosurgery, and Oncology. However, scrutiny revealed discrepancies in their declarations, raising suspicions of misclassification to evade customs duty.
The detailed inquiry showed that while documentation, including the DRAP Form-8, supported the classification of the goods as disposables, further validation was sought. The Healthcare Devices Association of Pakistan confirmed that “Sutures are classified as “disposables’ and are indeed used in multiple critical medical procedures.
A thorough analysis of the imports and the corresponding duty and taxes revealed the following:
| GD Reference | Assessed Import Value (PKR) | Duty & Taxes (PKR) |
| KPAF-HC-28673-07-11-2024 | 573,210,209 | 198,749,176 |
| KPAF-HC-36656-11-12-2024 | 52,847,361 | 18,323,766 |
| KPAF-HC-36649-11-12-2024 | 10,864,657 | 3,767,102 |
| KPAF-HC-30311-14-11-2024 | 20,974,359 | 7,272,440 |
| KPAF-HC-31008-18-11-2024 | 63,756,987 | 22,106,460 |
| KPAF-HC-31009-18-11-2024 | 26,600,429 | 9,223,167 |
| KPAF-HC-31775-20-11-2024 | 68,804,565 | 23,856,607 |
| Others | 140,070,128 | 48,566,514 |
| Total | 957,128,695 | 331,865,232 |
While the Collectorate initially cleared the goods based on available documentation, it has now requested further guidance from the Directorate of Intelligence and Investigation regarding the initiation of action under Section 32 of the Customs Act, 1969. This section addresses misdeclaration and fraudulent practices concerning customs procedures.
This case underscores the importance of rigorous customs oversight and proactive intelligence operations to curb corruption. Transparency, adherence to legal processes, and continuous vigilance are crucial to safeguarding national financial interests. The decision on further legal action against M/s Hoora Pharma will set a precedent for handling similar cases in the future.
The outcome of this investigation could lead to stronger regulatory measures and a more robust customs framework, ensuring that exemptions are granted rightfully and national revenue is protected from fraudulent activities.
