The Central Board of Revenue (CBR) has started 'fact finding inquiry' into the case of multi-million GST scam of the Bawan Shah Group of Companies to identify tax officials involved in the gross violations of different schemes, including the Duty and Tax Remission for Export (DTRE) scheme.
Sources told Business Recorder on Sunday that the main idea behind the internal inquiry is to pinpoint tax officials involved in this scam. The fact-finding inquiry would be completed within two months taking into account the terms of reference submitted by the Directorate General of Intelligence and Investigation, Customs and Excise.
The National Accountability Bureau (NAB) is conducting its own investigation in the case, whereas CBR inquiry would particularly focus on identifying the tax officials involved in the case. The CBR has handed over complete record to the Bureau for investigation, they added.
Intelligence's "terms of reference" have detailed guidelines for the inquiry committee to focus on specific areas to detect officials, who deliberately assisted Raja Zarrat, main culprit behind the scam.
The CBR has also prepared a list of tax officials, who remained deputed at Karachi during the time period when scam took place, sources said.
An inquiry team headed by Sher Nawaz has started obtaining record from DG Intelligence and data available with the regional offices in Karachi. However, inquiry officials have demanded more documents from the Collectorate of Sales Tax and Federal Excise, Karachi, and the National Accountability Bureau (NAB), Karachi. The inquiry committee has requested NAB to provide more record, which was handed over to NAB Karachi by the DG Intelligence, Karachi and Collectorate of Sales Tax, Enforcement, Karachi.
The inquiry would be completed on scrutiny of relevant documents for identifying tax officials involved in the scam.
The board had already given 90 days extension in the adjudication proceedings for completion of investigation in the scam. Previously, regional officials of Karachi had initiated action against the group under section 32A (Fiscal Fraud) of Customs Act, 1969 under which show-cause notice is served within 180 days of detection of customs duty and tax fraud for initiation of adjudication proceedings.
The adjudication officer is empowered to recover the amount involved in fraud besides slapping fine/penalty. Sources said that both the Collectorate of Customs, Export, Karachi and Collectorate, Sales Tax and Federal Excise, Karachi, had issued show-cause notices to the company for adjudicating the case to deal with the DTRE violations.
The Collectorate (Export) had issued show-cause notices to the delinquent exporters by invoking the provisions of Section 32 and 32(A) of the Customs Act, 1969 and the relevant DTRE rules.