The Federal Board of Revenue (FBR) has found that the total amount of fraudulent refunds and rebate paid to the Bawan Shah Group of companies was about Rs 2 billion, against the alleged Rs 20 billion. Sources told Business Recorder on Tuesday that the group misused five tax schemes for availing illegal refunds and rebates.
The schemes are Temporary Importation Scheme (SRO 410); customs rebate notification; DTRE remission; wrong input tax adjustments and sales tax refunds. The Board has completed investigation in the biggest tax fraud case, detecting tax fraud involving Rs 2 billion. The figure of Rs 2 billion has been worked out the basis of actual export data available with different departments. However, there is no figure of Rs 20 billion involved in the tax fraud. This amount of Rs 20 billion was wrongly reported whereas actual tax fraud of only Rs 2 billion has been committed by the group.
The FBR has also decided to issue "charge sheets" to the senior officials of customs and excise groups involved in issuance of illegal sales tax refund and wrong approvals of Duty and Tax Remission for Export (DTRE) scheme to the group. It is learnt that the board would issue "charge sheets" with detailed allegations against the tax officials.
The "orders of inquiry" have already been served to the involved officials. In the next phase, "charge sheets" would be served to these officials. The "charge sheets" would elaborate each and every act of omission and violation of law committed by the tax officials in issuance of illegal refunds to the said group. It seems that the FBR has expedited legal proceedings against the officials involved in the scam.
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