KARACHI (June 25 2009): A big income tax evasion of around Rs 335.87 million by some 117 textile units in raw cotton import during last eleven months has been detected. Sources told Business Recorder on Wednesday that 117 members of All Pakistan Textile Mills Association (Aptma) imported raw cotton without paying income tax of around Rs 335.87 million at the time of import. They said that raw cotton was earlier exempted from payment of income tax through SRO 567(I)/2008 dated June 11, 2008, which was uploaded by the Income Tax Wing (ITW) of the Federal Board of Revenue (FBR) on the PaCCS system. However, this exemption was not approved by the Parliament. Hence, income tax @ 1 percent became leviable on raw cotton from July 1, 2008, under finance bill 2008. But, ITW did not remove the SRO against the relevant entry in the PaCCS system. Consequently, the system kept on allowing exemption on import of raw cotton, providing huge losses to the national kitty, sources said. They said that raw cotton containing PCI code 52.01 is not exempted from IT and textile manufacturers have to pay 1 percent IT at the time of its import. They said that the error was detected by the Directorate-General of Post Clearance Audit, Customs, while analysing data of imports of various items. They, however, said the concerned authority issued the letters to all such importers and requested them to make payment, but they shunned the issue. They said that Aptma was of the view that SRO 567(I)/2008 was still not annulled. Hence, withholding tax under section 148 of Income Tax Ordinance could not be recovered on cotton import. They said that Aptma has also tabled the issue in a meeting summoned by FBR chairman with the hope to get amnesty in this connection. But, they added that FBR chairman has decided to adjust the leviable amount with IT refunds and the remaining amount, if any, would be paid by the textile millers in the next fiscal year. They said the Regional Tax Office (RTO), Karachi has expressed reservations on the said decision, saying that whole amount should be paid in current fiscal year. They added that RTO has sent a letter to the FBR chairman in this regard, asking him to revisit the decision.