The Auditor-General’s Report noted that the exemption given was invalid because it was only meant for undenatured ethyl of 99.5% purity level.
“The officer responsible did not counter-check the purity level declared on the customs form against the approval letter from the Duty Exemption Committee, and the tariff code of the raw material,” according to the A-G’s 2019 Report.
The Customs Department had on Jan 6 this year informed the Auditor-General that it had notified the affected company on Dec 23 last year on the undercollected import duty.
The Malaysian Investment Development Authority (Mida) had provided an explanation letter on March 17 following a meeting between the Customs Department representatives and Mida’s Tariff and Internal Audit section team four days earlier.
Mida explained that exemption was given for undenatured ethyl of 99.5% purity level that was imported by a company as raw material, without taking into consideration its purity level.
“Mida also informed that the Finance Ministry had also accorded excise duty exemption without specifying the purity level,” it noted.
The audit report called upon the Customs Department to carry out periodic auditing against companies that were given duty exemption in order to prevent loss of revenue.
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