Faisalabad-based firm found involved in ‘tax fraud’

ISLAMABAD: After withdrawal of zero rating regime for five export oriented sectors, the Federal Board of Revenue (FBR) has caught a Faisalabad-based firm involved in an alleged business of flying/fake invoices and committing tax fraud of Rs134.4 million, reported The News.

The FBR’s Directorate of Intelligence & Investigation (Inland Revenue), Faisalabad has unearthed a big scam of issuing/adjusting fake and flying invoices involving tax fraud of millions of rupees, the publication said.

FBR has launched tax fraud proceedings against the sales tax fraudsters and has also filed the First Information Report (FIR) against M/s Arrow International, its buyers, suppliers and other beneficiaries under section 37A of the Sales Tax Act, 1990.

The brief facts of the case revealed that the firm was registered into Sales Tax on 21-02-2017 with principal activity of “Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles/Wholesale of Household/Goods/Wholesale of textiles, clothing and footwear”.

The initial investigation have shown that the registered person filed income tax returns for tax years 2016, 2017 & 2018. According to the report, the person filed “Nil” returns for the year 2016 & 2017 and declared Rs385,400/income year 2018 with a business capital of Rs920,243 only.

Whereas the sales tax profile of the registered person revealed huge supplies of Rs1,401, 562,923 out of which Rs493,583, 967 as exports and Nil tax payment during the period of 02-2017 to 10-2017. The registered person also declared Rs1,321, 868, 074 purchases from 65 different textile units to facilitate them to avoid the payment of due tax.

The investigation revealed the firm is a non-existent and a dummy unit, which is registered for the purpose of issuance of fake/flying invoices and to facilitate buyers and suppliers to avoid payment of due sales tax, including further tax.

Originally published in The News