Chief Collectorate Customs Quetta Observations

Government of Pakistan
Office of the Director General Audit, Inland Revenue &

Customs (South)
Pakistan Audit & Accounts Complex,
Near NIM, University Road, Karachi
Phone # 021-99244837, 99244839, Fax # 021-99244838
No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020
Audit Observation No. 01
Sub: Misclassification of Expenditure of Rs. 127,531/-
According to Para 99 of GFR Vol.I provides that “ re-appropriation, which implies the
transfer of funds from one primary unit of appropriation to another unit within a grant can be
sanctioned under formal orders of the competent authority as specified in the financial control and
budgeting 2000. In no case it is permissible to re-appropriate from a unit with the intention of
restoring the diverted appropriation to that unit when saving becomes available under other units
later in the year”
During the scrutiny, of record of the Chief Collectorate Customs, Quetta for the financial
year 2019-20, it was observed that an amount of Rs.127,531/ was paid on account of payment to
Stationary (A-03901), but the expenditure was not incurred under proper head of account as
detailed below. This resulted misclassification of head of account as per details below. (List
Annexed)
Payment against irrelevant heads of account is not only violation of the budgetary
appropriation as approved by the parliament, but also an act of financial indiscipline.
Action Required
The above irregularity may be regularized from competent authority under intimation to
Audit.
(Akbar Ali)
Audit Officer (FAT-15)
The Chief Collector Customs, Customs House Quetta
Misclassification on Account of Stationary
The Chief Collectorate Customs Quetta during 2019-20
Brief
S. Booked in Head Appropriate Vendor Amount
Description of
No. of A/c Head of Account Name in Rs.
Expenditure
A-09201 Bukhari Paper
HP Toner 53A A-03901
1 Purchase of & Stationers 38,610
(05 No.) Stationary
Hardware
HP Toner 1102 A-03901
(05 No.) Stationary
Hardware
HP Toner 35A A-03901
(05 No.) Stationary
Hardware
Keyboard (05 A-03901
No.) Stationary
Hardware
A-03901
5 Mouse (05 No.) Purchase of & Stationers 4,388
Stationary
Hardware
TOTAL 127,531
Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Irregular Expenditure on Account of Courier & Pilot Service-Rs. 50,000/-
According to the Government of Pakistan Cabinet Division’s U.O No.7-1/2018 DATED

20th March 2018 directed that all government offices shall use services of Pakistan Post for mailing
their domestic and international correspondence.
During the scrutiny, of record of the Chief Collectorate Customs, Quetta for the financial
year 2019-20, it was observed that the expenditure incurred under the head (A03205- Courier &
Pilot Service) through 09 bills by M/s TCS without considering the government instruction. This
resulted into irregular expenditure of Rs.50,000/- as detailed below.
Head of
S.No Vendor Cheque Amount
Accoun Description Date
. Name No in Rs.
t
690686 16/10/201
1 A03205 Courier and Pilot Service Tcs (Pvt) Ltd 24,225
0 9
690905 10/12/201
7 9
690973 20/12/201
5 9
691085 17/01/202
2 0
691264 27/02/202
1 0
739352 01/04/202
3 0
739498 29/04/202
6 0
739530 11/05/202
8 A03205 Courier and Pilot Service Tcs (Pvt) Ltd 878
1 0
739725 11/06/202
5 0
TOTAL 50,000
Action Required:-
Irregularities need to be justified under intimation to Audit.
(Akbar Ali)
Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Non-deduction of income tax on rental income – Rs. 38,948
In respect of rental income under section 15 and deduction of tax under section 155 of the
Income Tax Ordinance, 2001 Circular No. 3 of 2007 (Income Tax) issued by FBR vide
No.F.4(29)ITP/2002-S-155 Islamabad, September 29, 2007 stipulated in Para 1(ii) as under:
ii. What treatment is to be given to self-hiring Tax is to be deducted as per slab as the taxpayer is
cases? receiving payment as owner of the property
And Para 1(iv) of the Circular stipulated as under:
iv. If the owner gives Under section 155 of the Income Tax Ordinance, 2001, a prescribed person
undertaking/ affidavit is required to deduct tax @ 5% at the time of making payment on account of
that he has no other rent of immoveable property. For deduction of tax no threshold has been
source of income and given under the law and the payer is responsible to deduct tax from the rent
rental income is his paid of any amount. Further, as explained vide paragraph 24 of CBR’s
only source of income, Circular No.1 of 2007 an amendment has been made in section 155(2) by
should such certificate virtue of which tax deducted in the case of an individual or AOP having no
be accepted and no tax other taxable income is refundable on filing of the return of income. In such
on income less then Rs a case the taxpayer may file application for refund under section 170 of the
150,000 be deducted. Income Tax Ordinance, 2001.
During audit of accounts of Administrative Expenditure of the Chief Collectorate Customs,
Quetta, for the year 2019-20, it was observed that the required tax was not deducted from the
payment made to the owner of hired house on account of rent for residential building.
Due to non-deduction of tax, the Government sustained a loss of revenue of Rs. 38,948/- as
per detail given below:
S Name of Rent Income
Designation Period Rate Applicable (Slab) Calculation
# Applicant Paid Tax
5 per cent of the gross
amount exceeding * 390,132
Additional 01.07.2019 Rs.150,000. 390 - 150,000
Mr. Riaz
01 Collector to Where the gross amount ,132 240,132 12,006
Hussain
(BS-19) 30.06.2020 of rent exceeds × 5%
Rs.150,000 but does not 12,006
exceed Rs.400,000.
Rs.12,500 plus 7.5 per * 592,560
cent of the gross amount - 400,000
Mr. Zulfikar Chief 01.07.2019 exceeding Rs.400,000. 592 192,560
02 Ali Collector to Where the gross amount ,560 × 7.5% 26,942
Chaudhary (BS-21) 30.06.2020 of rent exceeds 14,442
Rs.400,000 but does not + 12,500
exceed Rs.1,000,000. 26,942
TOTAL 38,948
The matter may please be looked into and corrective action under law be taken to recover
the loss under intimation to Audit.
(Akbar Ali)
Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Irregular Payment of Mobile Phone Charges – Rs. 9,600/-
As per Cabinet Division Mobile Phone Policy circulated vide OM No.3/(3)/T&M/2015-

RA-IV dated 15.04.2016 mobile charges as an allowance through salary to all entitled regular
emplyees working in the Ministries/Division in BPS-17-22. As per clarification regarding use of
mobile phone policy vide OM No. FNo.2/26/2005-RA-IV dated 11.06.2009 at S No.2, facility is
not admissible to the officer working in attached and subordinate department etc.
During the scrutiny of record of office of the Chief Collectorate Customs, Quetta for the
financial year 2019-20, it was observed that following officer was availing the mobile phone charges
which was in contradiction to the clarification issued by Cabinet division. This resulted in irregular
payment of mobile phone charged amounting to Rs.9,600/-
Personal No. of Amoun
S. No. Name Period Rate
Designation ID Months t
Riaz Additional July 2019 to
1 10179257 800 12 9,600
Hussain Collector (BS-19) June 2020
The above irregularity maybe regularized from competent the authority under intimation
to Audit.
(Akbar Ali)
Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Non-Realization of Stamp Duty Rs 1,750
According to Section 3 read with Schedule-I of Stamp Duty Act, 1899 any instrument of
the nature of memorandum of agreement made or entered into by a contractor with Government,
controlled by Federal Government to produce stores and materials liable to pay stamp duty @ 25
paisas for every one hundred rupees or part thereof the amount of contract.
During audit of Administrative Expenditure of the Chief Collectorate Customs, Quetta for
the financial year 2019-20, it was observed that the contract was awarded to the General Traders
for procurements of photocopiers and scanners for worth payments of Rs.700,000 but the stamp
duty as narrated above was not levied which comes to RS. 1,750/
Action Required: -
The amount may be recovered and deposit into Government Treasury.
(Akbar Ali)

Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Non-disposal of Newspapers purchased during 2019-20
During administrative audit of expenditure in respect to Office of Chief Collector Customs,
Quetta for the financial year 2019-20 it has been observed that Collectorate purchased daily
newspapers amounting to Rs.96,360/- during 2019-20 but the same has not been disposed of as
required under Para 166 & 167 of GFR Vol-1.
The Chief Collectorate Customs, Quetta is requested that all newspapers may be sold out in
observance of above rule and sale proceeds be deposited into the government treasury under
intimation to the Audit.
(Akbar Ali)

Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Non-disposal of spare parts purchased/replaced on account of repair of

vehicles/transport during 2019-20
According to rule 167 of General Financial Rules, subject to any special rules or orders
applicable to any particular department stores which are reported to be obsolete, surplus or
unserviceable may be disposed of by sale or otherwise under the orders of the authority competent
to sanction the writing off of a loss caused by deficiencies and depreciation equivalent to their
value.
During administrative audit of expenditure in respect to office of Chief Collectorate
Customs, Quetta for the financial year 2019-20 it has been observed that the Collectorate incurred
expenditure of Rs.1,950,000/- during 2019-20, on account of A-13001- repair of transport but
disposal of spare parts replaced during the repair was neither done nor shown to Audit.
It was requested that the omission may be justified under intimation to Audit.
(Akbar Ali)

Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Non-maintenance of Movement Register and Log book
During audit scrutiny of the record pertaining to the Chief Collectorate Customs, Quetta
for the financial year 2019-20, it was observed that no Movement Register and Log Book were
being maintained in the Collectorate as required to be maintained by according to Para 15 of
Rules for the Use of Staff Cars 1980 .
The Chief Collectorate Customs, Quetta was requested that omission may be justified,
and remedial measures may be taken in this respect and the Audit be intimated accordingly.
(Akbar Ali)

Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Audit Observation No.08
Sub: Non-carrying out physical verification of Stores
Under Rule-159 of GFR Vol.–I Physical Verification of Stores is required to be carried

out once in every year.
During audit of accounts of Administrative Expenditure of the Chief Collectorate

Customs, Quetta, for the year 2019-20, it was observed that Physical Verification of Stores was
not carried out as any such report was not made available to Audit.
Non-carrying out physical verification is deviation of the above rule.
The matter may please be looked into and justified to Audit
(Akbar Ali)

Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Non-maintenance of Stationery Register
During audit of accounts of Administrative Expenditure of the Chief Collectorate
Customs, Quetta for the year 2019-2020, it was observed that the Collectorate incurred an
amount of Rs.600,000 /- on account of A-03901-Stationery for the financial year 2019-2020 but
Stationery Register was not maintained. The same was not shown to the Audit team in the
absence of the Stationery Register, the amounts spend on purchase of stationery items cannot be
verified.
The Chief Collectorate Customs, Quetta had to clarify its position under intimation to
Audit.
(Akbar Ali)

Customs (South)
Phone # 021-99244837, 99244839, Fax # 021-99244838
Sub: Non-carrying out of Internal Check
According to Rule-13 of GFR Vol.–I, internal check of expenditure accounts is to be
carried out at least once in a year by a nominee of the head of the office.
In disregard to the above referred provision of law, it has been observed during audit of
accounts of administrative expenditure in respect of the Chief Collectorate Customs, Quetta for
the year 2019-2020, that internal check of expenditure accounts had not been conducted during
the period under. The result is that the internal audit report for the year 2019-20 was not made
available to Audit. The matter is serious one and warrants immediate attention of the head of the
office. Non-carrying out of Internal Check is a clear violation of/ deviation from the financial
rules.
It is requested that:
a) Internal check may be conducted immediately under intimation to Audit.
(Akbar Ali)

Chief Collectorate Customs Quetta Observations

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Government of Pakistan

Office of the Director General Audit, Inland Revenue &

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 01

Sub: Misclassification of Expenditure of Rs. 127,531/-

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 02

Sub: Irregular Expenditure on Account of Courier & Pilot Service-Rs. 50,000/-

According to the Government of Pakistan Cabinet Division’s U.O No.7-1/2018 DATED

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 04

Sub: Irregular Payment of Mobile Phone Charges – Rs. 9,600/-

As per Cabinet Division Mobile Phone Policy circulated vide OM No.3/(3)/T&M/2015-

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 0

Sub: Non-Realization of Stamp Duty Rs 1,750

The amount may be recovered and deposit into Government Treasury.

The Chief Collector Customs, Customs House Quetta

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 05

Sub: Non-disposal of Newspapers purchased during 2019-20

During administrative audit of expenditure in respect to Office of Chief Collector Customs,

required under Para 166 & 167 of GFR Vol-1.

intimation to the Audit.

The Chief Collector Customs, Customs House Quetta

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 06

Sub: Non-disposal of spare parts purchased/replaced on account of repair of

During administrative audit of expenditure in respect to office of Chief Collectorate

expenditure of Rs.1,950,000/- during 2019-20, on account of A-13001- repair of transport but

The Chief Collector Customs, Customs House Quetta

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 07

Sub: Non-maintenance of Movement Register and Log book

being maintained in the Collectorate as required to be maintained by according to Para 15 of

Rules for the Use of Staff Cars 1980 .

The Chief Collector Customs, Customs House Quetta

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No.08

Sub: Non-carrying out physical verification of Stores

Under Rule-159 of GFR Vol.–I Physical Verification of Stores is required to be carried

During audit of accounts of Administrative Expenditure of the Chief Collectorate

Non-carrying out physical verification is deviation of the above rule.

The matter may please be looked into and justified to Audit

The Chief Collector Customs, Customs House Quetta

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 09

Sub: Non-maintenance of Stationery Register

During audit of accounts of Administrative Expenditure of the Chief Collectorate

The Chief Collector Customs, Customs House Quetta

No. FAT-15/Obs./Exp./Chief Collectorate Quetta /K/2020-21 Dated: -09-2020

Audit Observation No. 10

Sub: Non-carrying out of Internal Check

According to Rule-13 of GFR Vol.–I, internal check of expenditure accounts is to be

a) Internal check may be conducted immediately under intimation to Audit.

The Chief Collector Customs, Customs House Quetta

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