KARACHI: The Directorate General of Post Clearance Audit (PCA) South has uncovered a massive tax evasion scam amounting to a staggering Rs. 1.08 billion involving the misuse of the Export Facilitation Scheme (EFS) by a company, based in Bara Bazaar, KPK.

According to details, the PCA and Internal Audit, Islamabad, received credible information that the said company was involved in misusing the FATA/ PATA exemption of Sales Tax, Additional Sales Tax, and Income Tax granted on input goods. The exemption was intended to facilitate the manufacture and sale of goods within the erstwhile FATA/ PATA regions.

An audit team was promptly dispatched to the company’s premises on February 14, 2024, where they conducted a thorough stock-taking exercise. The team’s findings were alarming.

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Despite the company having imported 4,063 metric tons of fabric under the exemption scheme valued at Rs. 1.8 billion, the audit team found no evidence of the stock’s consumption or sale within the designated regions.

When asked to provide sales receipts and consumption certificates, the company’s representatives failed to produce any documentary evidence to support the consumption of the stock. Multiple notices and opportunities were granted, but the accused company did not comply.

Consequently, it has been established that the company’s directors and associates had violated various provisions of the Customs Act, 1969, the Sales Tax Act, 1990, and the Income Tax Ordinance, 2001, by illegally removing and selling the exempted goods outside the tribal areas.

Efforts are currently under way to arrest the nominated accused persons, and further investigations are in progress.

An FIR against the company and its associates has been lodged for their alleged involvement in this significant tax evasion scam. This scam is also linked to a previous EFS scam detected by PCA North that involved Rs3billion tax evasion.

Copyright Business Recorder, 2024