'Fake' refund claims of two more Karachi units blocked: DI and IIR issues 'red alerts'

Despite immense pressure from powerful mafia of fraudulent refund claimants in Karachi, the Federal Board of Revenue's (FBR) Directorate of Intelligence and Investigation, Inland Revenue (IR), issued two more 'Red Alerts' in connection with bogus refund claims, preventing revenue leakage in Karachi.
Sources said on Sunday that the agency resumed issuance of 'Red Alerts' to check release of refund cheques in bogus claims. Astonishingly, in both cases, the first refund claimant is a textile unit whereas, the other is a chemical unit with same suppliers, amount of refunds, period of claims and dates of filing claims. Even the amount of refund claims of these textile and chemical units is the same.
This shows that the mafia is so strong that they did not even bother to change the amount of refund claims.
It is clear that the mafia has no fear of the FBR and its field formations in Karachi, as two units of different sectors have filed claims with the same particulars. The mafia seemed confident that two identical claims of separate units would be duly processed and sanctioned by the tax department and nobody would raise any objection about the claims.
Sources said that Federal Tax Ombudsman (FTO) Dr Shoaib Suddle has taken notice of a fake refund scam worth Rs 4.45 billion. At present the FTO office is investigating the cases of fake refunds, sources added.
Between 2009 and February this year, 26 to 27 units of Karachi were found involved in filing refund claims every month to obtain fraudulent claims involving total amount of Rs4.4 billion.
The directorate of intelligence IR issued 'Red Alerts' in all 27 cases. When the alerts are issued, tax officials concerned in the field formations cannot further process the refund claims for issuance of cheques. The fraudulent refund claimants started filing monthly sales tax returns showing no activity after issuance of "Red Alerts". The genuine units cannot suddenly change their status of filing of returns, reflecting serious problems in filing of claims by fraudulent units.
The issuance of 'Red Alters' immediately stopped leakage of billions of rupees on monthly basis in the form of bogus refund claims issued in connivance with the concerned tax officials, sources said.
Sources maintained that now the mafia has again become active and started filing bogus refund claims in Karachi.
According to sources, the issuance of 'Red Alerts' by the directorate of intelligence IR has annoyed not only the powerful mafia, but the Inland Revenue officials of Karachi, who are part of the organised gang of fraudulent refund claimants.
Though bulk of activity of 'Red Alerts' relate to Karachi, similar cases have also been detected in Lahore and Islamabad. Six cases fall within the jurisdiction of Regional Tax Office (RTO)-I Karachi; 17, RTO-II Karachi; 4-Units, RTO-III Karachi and one unit belongs to RTO Hyderabad.
Prior to the issuance of 'Red Alerts', massive dubious/bogus refunds were issued in the said cases. Five of the refund claimant registered units have been blacklisted by the concerned RTOs after issuance of 'Red Alerts'. In the past, usually refunds scams have been unearthed following release of the refund claims
Sources said that the abnormal return profiles of majority of these units after issuance of "Red Alerts" also indicate their dubious nature. In order to investigate cases in which 'Red Alerts' were issued, investigative audit under section 38 of the Sales Tax Act, 1990 was authorised by the FBR to the directorate of intelligence IR. Though, similar 'Red Alerts' were issued at Lahore and Islamabad as well, yet it is only an organised crime and mafia at Karachi has been making utmost efforts to regain its lost ground.