The computerised risk-based evaluation of sales tax (CREST) team of the Federal Board of Revenue (FBR) has unearthed massive evasion of sales tax by 11 units, involved in making supplies on the basis of illegal input tax adjustments, denting the national exchequer badly.
Sources told Business Recorder here on Saturday that Asim Majid Khan Commissioner Inland Revenue Project Director CREST and his team has conducted a detailed analysis of the business data through CREST and detected fake units involved in fraudulent activities. Asim has also compiled a detailed report on the basis of analysis and research of buying and selling activities and sales tax invoices data.
According to the data, the CREST domain team is working on identifying the potential cases to prioritize processing to yield maximum revenue. In this regard, the team has found certain irregularities in business activities of certain registered persons who are making supplies on the basis of illegal input tax adjustments and thus avoiding actual payment of output tax. The way, they have adopted to avoid payment is that a registered person first make purchases from such registered persons who are either Null-Filer, Nil-filer, blacklisted and other fake unit or who have not declared any supplies to him. Subsequent to purchases from Null-Filer, Nil-filer and Blacklisted etc, they also generate fake output tax to facilitate others. In this way, no actual transaction takes place among such registered persons and they cause huge loss to the Government exchequer.
Keeping this in view, it is established that these fraudsters have caused colossal loss to the public exchequer amounting to Rs.198,949,893 they are likely to cause further massive loss of revenue, if not halted at this stage. Thus, there is an urgent need to rein in these fraudsters.
The units identified by the CREST team included Ahmed enterprises; Friends & sons; Ramzan enterprises; Tayyab enterprises; Zubair enterprises; Farooq marketing services; Getwell distributors; Global enterprises; Mehran traders; Ahsan brothers and Regent services.
On the basis of above, it is also proposed that criminal proceedings under Sales Tax Act, 1990 against the registered persons and against their buyers may be initiated, CREST team added.
Through another analysis, the CREST domain team has identified certain irregularities in business activities of registered person namely, M/s Haseeb Enterprises. The said registered person has been making supplies on the basis of illegal input tax adjustment and thus avoiding actual payment of output tax. The way, he has adopted to avoid payment is that the registered person first made purchases from such registered persons who are either Null-Filer/Nil-filer/Blacklisted/other fake unit or who have not declared any supplies to him. The registered person has shown supplies after July-2014, where no input tax or carry forward was available in the returns. On scrutiny, it was found that registered person has not deposited output tax amount by generating fake amount of sales tax withheld in relevant column. In this way, the registered person has avoided payment of sales tax.
In view of the above, it is established that the registered person has caused colossal loss to the public exchequer amounting to Rs.89,624,334 and he is likely to cause further massive loss of revenue, if not halted at this stage. Thus, there is an urgent need to clutch this fraudster, CREST team added.
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