The Federal Board of Revenue (FBR) has suspended the sales tax registration of Shell Pakistan Limited (SPL) over the tax evasion of around Rs 1.675 billion, it is learnt.
Sources said the largest revenue collecting arm of the FBR - Large Taxpayers Unit (LTU), Karachi has suspended the sales tax registration (0205271000346) of SPL over tax evasion of over Rs 1.6 billion. Resultantly, the company cannot import petroleum products nor can claim input tax on its sales, for now, sources said.
They said LTU, Karachi had issued a show cause notice to the company and fixed a hearing for April 30, 2018, adding that if the SPL fails to clarify its position before the tax authorities, the recovery exercise (attachment of bank accounts) would be initiated.
The show cause notice, exclusively available to BR, revealed that the tax department had found serious discrepancies in the data available at e-portal of the FBR for the period from November 2016 to February 2018.
During the said period, the company has suppressed the sales of 2,096,357 metric tons of its lubricating oil and evaded sales tax amounting to Rs 1.306 billion, two percent extra tax amounting to Rs 153.69 million along with default surcharge Rs 142.503 million under section 34 and penalty Rs 73 million under section 33 of the Sales Tax Act 1990.
Replying to a question, sources said the discrepancies were intimated to the CFO and tax head of Shell Pakistan Limited during their visit to LTU, Karachi on April 11, 2018. The same was also communicated in writing to the company vide letter DCIR/E&C/U-2-Z-IV-LTU-KHI/2017-18 dated April 18, 2018.
Moreover, sources said although the company through its letter No DST1681 furnished reconciliation on April 20, 2018, the same was found completely devoid of facts.
The LTU, Karachi is of the view that there were substantial and convincing evidence to conclude that Shell Pakistan Limited evaded tax by committing tax fraud deliberately as defined under sub-section (37) of section 2 of Sales Tax Act 1990.
They further said that the fraudulent practice continued till last return filed for the month of March 2018. Therefore, LTU, Karachi in order to safeguard the government revenue has ordered suspension of the sales tax registration of Shell Pakistan Limited under section 21(2) of Sales Tax Act 1990 read with Rule 12 (a)(1) of the Sales Tax Rules 2006 read with SRO 555 (I)/2006 with immediate effect.
They said if the company's registered person neither replied nor appeared on hearing, the case would be decided ex-parte on the basis of available record.
When contacted, PR company of Shell Pakistan denied to have received any such notice from LTU, Karachi and refused to comment on the issue.
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