Lahore Sales Tax Collectorate detects Rs 17.4 million refund fraud

The Collectorate of Sales Tax and Federal Excise Lahore has detected a refund fraud involving an amount of Rs 17.4 million, arrested the owners of three textile units and got registered FIRs against them.
Giving details of the fraud, Muhammad Nazim Saleem, Collector Sales Tax and Federal Excise Lahore told a select group of journalists here that the collectorate recovered Rs one million from these units while an amount of Rs 16.5 million was still outstanding against them.
He said that during the course of investigations, the officials concerned came to know that Ruahaj Tex Ltd, Texware Ltd, and Zeeshan Textile Ltd, had got Rs 17.4 million refunded fraudulently by showing fake documents to the collectorate. These units were registered in Lahore but they had claimed to have exported material from Multan. "We arrested the owners of these three units, registered FIRs against them and produced them in the Court." Later they were released on bail. The said amount had been refunded to these units between 2003 and 2005, he pointed out.
About the revenue collection, he said that his collectorate collected Rs 5,212 million sales tax against the target of Rs 5,100 million while Rs 100 million FED were collected against the target of Rs 94 million, in the year 2005-2006. Similarly, the collectorate refunded an amount of Rs 4,684 million during the year 2005-06 while the pendency for the year involved Rs 1,800 million which will soon be cleared.
The figure for the year 2004-2005 was amounted to Rs 7,279 million. About reduction in issuance of refund amount, he said it happened following the government move to reduce duty to zero level on five major sectors ie textile, carpet, sports, leather and surgical.
To a question about the restoration of general audit, Nazim Saleem said that CBR had stopped it in October 2004, however, later it allowed 'desk audit' which was being conducted. Subsequently in 2005, CBR also allowed 'investigative audit' which is conducted in case of serious reservations or discrepancies.