The Directorate General of Post Clearance Audit (PCA) has uncovered a large-scale under-invoicing scam in luxury vehicle imports.
Auditors reviewed 1,335 Goods Declarations and found that vehicles were consistently declared at values far below their actual worth. The total declared import value stood at Rs. 670 million, while the actual assessed value was Rs. 7.25 billion.
In one case, a 2023 Toyota Land Cruiser imported from Japan was declared at just Rs. 17,635 despite an actual value of Rs. 10 million. The resulting customs duty and taxes amounted to Rs. 47.2 million, indicating 99.8 percent under-invoicing.
There was a tax shortfall of Rs. 17.5 billion between December 2024 and March 2025, according to an audit report.
The report identified systematic evasion of foreign exchange regulations, as importers failed to provide proof of remittances for vehicle purchases. This suggests widespread use of informal channels.
Auditors also flagged the link between import under-invoicing and asset under-reporting in income tax filings. Despite identifying the discrepancies, customs officials failed to enforce documentation checks, enabling the exploitation of the Faceless Customs Assessment (FCA) system.
