Regional Tax Office-II Karachi has busted an organised gang in Karachi involved in illegal business of buying and selling fake/flying invoices without actual/physical transactions of goods and got registered FIR against the culprits, causing massive loss to the national kitty.
Sources told Business Recorder here on Thursday that the whole operation was supervised and monitored by Khawaja Tanveer Ahmed, Chief Commissioner RTO-II Karachi, who is making personal efforts to recover the evaded amount from the culprits. The key figure of the illegal operators has been arrested and sent on 7-day remand by the Special Judge, Customs Court. The RTO-II Karachi has submitted a comprehensive report to FBR Chairman Ali Arshad Hakim here on Thursday in this regard.
Details of the scam revealed that the Chief Commissioner Secretariat RTO-II Karachi has been actively engaged in taking action against the fraudulent gangs involved in obtaining illegal refunds/input tax adjustments and business of fake/flying invoices, causing huge loss to the national exchequer. In this regard, RTO-II Karachi is conducting several operations and busted different gangs involved in various fraudulent activities. Khawaja Tanveer has taken special measures in Karachi to check business of fake/flying invoices with the help of electronic database and actual fraud committed by business units, which physically do not exist on the declared business addresses.
According to sources, RTO-II Karachi has initiated investigation on receipt of specific, credible information that M/s Mars Chemicals was engaged in massive evasion of sales tax and tax fraud in collusion with its suppliers and buyers by way of buying and selling fake/flying invoices without actual, physical transactions of goods.
The data on FBR web-portal revealed that the unit declared its main activity as "importer" but its business activity as "retailer". It got sales tax registration on July 26, 2010 and filed its first Sales Tax-cum-Federal Excise return for the tax period July 2010. In this return it claimed input tax adjustment of Rs 2,987,547 against GDs having dates prior to its registration. Cross-checking with customs data confirmed that no such imports had been made by the said unit. Against this, they showed supplies to M/s. Textile Creation involving sales tax Rs 320,195, enabling it to take unlawful input tax adjustment.
The chemical unit did not file any sales tax returns from August 2010 to March 2011 and declared "Nil" business activity in the returns for tax periods from April 2011 to December 2011 (except May 2011, showing minor imports). The sales tax return for January 2012 was filed late on 17-06-2012 and huge purchases of Rs 903,243,774 were shown from M/s Fabrivo Industries involving sales tax worth Rs 171,450,119. On checking the profile of the said Industries on e-FBR, it was observed that it has declared its main activity as "Weaving of Textiles".
It got sales tax registration on 22-04-2003, but started showing transactions since 2011. In its return for April 2001, it showed imports of Rs 84,362 involving sales tax, in May 2011 imports of Rs 479,185,048 involving sales tax Rs 81,461,458 and in June 2011 imports of Rs 420,119,310 involving sales tax Rs 92,426,248. By these transactions it showed carry-forward of Rs 173,776,624 from June 2011 to December 2011, entire amount of which was shown as of supplies made to M/s. Mars Chemicals in January 2011.
On cross-checking with customs data, it was found that no such imports were made by M/s Fabrivo Industries, and thus the GDs mentioned in the return were fake/bogus. Thus, it was established that the entire input tax claimed by M/s Mars Chemicals on the basis of purchases declared by M/s Fabrivo Industries is illegal and fraudulent.
After obtaining unlawful/fraudulent input tax adjustment, the unit then proceeded to issue sales tax invoices showing supplies to a number of buyers, enabling these buyers to fraudulently take input tax adjustment and refund. The list of 24 beneficiaries along with amounts of sales tax evaded by each unit revealed that huge amount of sales tax was involved.
Physical visit to the declared address revealed that no such business existed there. Accordingly, its sales tax registration was suspended by the Commissioner Inland Revenue, Zone-I, RTO-II, Karachi vide Order u/s 21(2) of the Sales Tax Act, 1990. The FIR has accordingly been lodged against M/s Mars Chemicals and other related firms. One person namely Allah Rakkha, son of Abdul Qadir, the alleged front man of the illegal operation, has been arrested and has been sent on seven days remand by the Special Judge, Customs Court. Efforts are being made to arrest the other accused persons and recover the amount involved, sources added.
Comments
Comments are closed.