The Directorate of Intelligence & Investigation (Inland Revenue), Faisalabad, has unearthed a big scam of issuing/adjusting fake and flying invoices involving tax fraud of millions of rupees.

Accordingly, tax fraud proceedings against the sales tax fraudsters have been initiated and the first information report (FIR) has been lodged against M/s Arrow International, its buyers, suppliers and other beneficiaries under section 37A of the Sales Tax Act, 1990.

The investigations revealed that M/s Arrow International is a non-existent and a dummy unit, which is registered for the purpose of issuance of fake/flying invoices and to facilitate buyers and suppliers to avoid payment of due sales tax, including further tax.

In-depth investigation revealed that the firm M/s Arrow International was registered for the purpose of sales tax in 2017 with principal activity of wholesale and retail trade; repair of motor vehicles and motorcycles/ wholesale of household goods/wholesale of textiles, clothing and footwear.

Further, income tax returns filed by the firm for tax year 2016, 2017 & 2018 revealed that the registered person filed "Nil" returns for the year 2016 and 2017 and declared taxable income of Rs 385,400 for the year 2018 with a business capital of Rs 920,243 only. Whereas the sales tax profile of the registered person revealed huge bogus supplies of Rs 1,401,562,923 during the period of 02-2017 to 10-2017 but the firm did not pay a single penny in the national exchequer during this period.

Copyright Business Recorder, 2019