FBR Intensifies Operations against Tax Evaders, Fraudsters

In line with the directions of the Federal Government and Chairman Federal Board of Revenue (FBR), the Directorate General Intelligence and Investigation (Inland Revenue) has intensified the country wide action against tax evaders and fraudsters.

The action will be against individuals, AOPs and corporate entities involved in evasion of Sales Tax, Income Tax and Federal Excise Duty. In this regard, Directorates of Intelligence and Investigation (Inland Revenue) has expedited the crackdown against tax fraudsters based on credible evidence and following due process of law based on legal provisions laid down in various tax statutes.

As per FBR, the Directorate of Intelligence and Investigation-IR, Islamabad has detected a big case of sales tax evasion. As per the intelligence gathering, one of the Islamabad based plywood manufacturing unit was involved in evasion of sales tax by suppressing its taxable supplies in monthly sales tax returns. Pursuant upon the information and in order to safeguard the public revenue, a raid was conducted and premises of the said unit were searched under section 38 and 40 of the Sales Tax Act, 1990.

During the search, various record including invoices, receipt book, CPUs have been impounded and its scrutiny is underway.

Furthermore, two raids were conducted by the Islamabad Directorate on 22nd December against two un-registered businesses located in Chakwal involved in huge tax evasion. Record has been impounded and its scrutiny is underway. It is expected that quantum of tax involved will be in hundreds of millions in the three raids conducted by the Islamabad Directorate.

In a similar move, a campaign against smuggled, duty non-paid/illicit and counterfeit cigarettes, in compliance of FBR’s special directives dated 11th December, 2020 to “deploy maximum resources for control of the menace of illegal and injurious cigarettes”, the Inland Revenue Intelligence & Investigation (I&I-IR) Directorate, Faisalabad has seized 426 cartons (4,260,000 sticks) from traders in Faisalabad and Sargodha, by conducting three different actions in exercise of powers under section 38 of the Sales Tax Act, 1990 and Rule 62 to 67 of the Federal Excise Rules, 2005. The seized consignments are prima facie counterfeited/non-duty paid and are accordingly taken into custody in the presence of the proprietors and the representatives of local Press Club. Estimated tax and duties evaded on the recovered merchandise in all three cases may run in Multi Million Rupees.

In the drive against illicit tobacco trade, the Directorate I&I-IR, Peshawar having jurisdiction over KPK Province, has taken multiple actions against trade of counterfeit and non-duty paid cigarettes. The surveillance squad of Peshawar Directorate, on receipt of a credible information intercepted a truck in Swabi and recovered from it 20 cartons of filter rods having no relevant documents in support of payment of excise duty and taxes.

On further inquiry, the team raided godown from where the filter rods were loaded in the truck and 19 more cartons of filter rods were confiscated for lack of having documentary evidence of payment of duty/taxes.

A total of 39 cartons of non-duty paid filter rods were recovered which are sufficient for production of 9,126,000 sticks of cigarettes (913 cartons) with anticipated duty/tax evasion of more than Rs. 25,000,000/- in addition to evasion of duty of Rs. 1,521,000/- being payable at clearance stage. In another action, more than 50 Cartons of counterfeit cigarettes were confiscated from two passenger vehicles in Peshawar.

On the basis of reliable information, the Directorate I&I-IR, Multan also conducted raids on two PVC manufacturers and successfully retrieved ample record and other documents. These units are involved in massive evasion of taxes by way of concealment of production/ issuance of flying invoices and incurred substantial loss of revenue to government exchequer. In an action against illicit non-duty paid tobacco trade, the Directorate I&I-IR, Multan has also seized 200,000 counterfeit/non-duty paid cigarettes and detained the stock, under section 38 of the Sales Tax Act, 1990 and Rule 62 to 67 of the Federal Excise Rules, 2005.