Directorate General of Intelligence and Investigation Inland Revenue (IR) has issued 'red alert' against a company engaged in manufacturing and marketing of polyester filament yarn and other polyester related products, for allegedly committing tax fraud.
Sources told Business Recorder that the registered office of the said company is located in Quetta. It has been alleged that the company has evaded tax amounting to Rs 67,437,669 by committing tax fraud. The analysis of data revealed that the company has been making purchases and supplies from/to the blacklisted and suspended units. Keeping this in view, the agency has issued 'red alert' to the chief commissioner-IR, RTO, Quetta with the recommendation to conduct investigative audit of the company for recovery of the evaded amount of tax.
According to the information collected by I&I-IR, the registered person was involved in tax fraud. In order to investigate the matter, the registered person was summoned to ascertain the veracity of the input tax and output tax claimed by him. The inquiry revealed that the taxpayer has been making purchases as well as supplies from/to the blacklisted and suspended units. It has been found that he claimed output tax of Rs11,685,806 against fake/dubious invoices while the amount claimed against fraudulent input tax stands at Rs55,753,863. In view of this state of affairs, 'red alert' under para 3(b) of Policy Document of FBR dated 25.10.2011 has been issued to the chief commissioner-IR, Regional Tax Office (RTO), Quetta, with the recommendation to conduct investigative audit under section 38 of the Sales Tax Act, 1990 and recover the sales tax of Rs67,437,669 from the taxpayer, agency added.
Sources said that the red alerts are issued by the agency to caution the field formations about suspected cases of tax frauds etc. The Federal Board of Revenue's (FBR) intelligence arm is empowered to issue 'red alerts' during the Pre-Refund Analysis (PRA) of refund claims in cases where information was received about suspected claims to combat menace of bogus/dubious refund claims.
Under the policy of 'red alert,' the cases falling within the category of 'red alerts' would be subjected to computerised analysis using the refund software of the FBR to check the authenticity of the data electronically maintained by the department.
The purpose of the 'red alerts' is to check the claims internally by the department without stopping the routine procedure for processing of refund claims. The concept of 'red alerts' has made the tax officials vigilant to check cases where refund claims are under process but some information has been received which makes such claims doubtful.
In the past, the DG I&I IR had identified cases of 'red alerts' on the basis of high-risk areas identified on the basis of monthly sales tax analysis and federal excise returns being filed by the registered persons. The agency had picked high-risk areas which formed basis for issuing 'red alerts' in case of filing of sales tax claims. The cases falling within the category of 'red alerts' would be subjected to computerised analysis using the refund software of the FBR to check the authenticity of the data electronically maintained by the department.