Rs34.708mn tax fraud unearthed

RECORDER REPORT

KARACHI: Federal Board of Revenue has unearthed a tax fraud of Rs. 34.708 million.

The Regional Tax Office, Karachi (RTO) in pursuance of the approval granted by the board has conducted investigative inquiry of M/s S.G. along with its suppliers and buyers for misuse of SRO-283/2011.

The initial investigation reveals that the unit got it registered in RTO, Karachi with the name M/s S G Impex vide STRN-1703210000528 & NTN-3178382-1. As per registration profile, the registered person has declared Bank Account # 00217164171 at one of the private banks. However, on verification from the bank, it transpired that the bank holds no accounts under the title of S G Impex.

Furthermore, on physical verification it transpired that the unit does not exist on given address and no business activity was observed to be carried out at the declared address.  The registered person declared fictitious purchase of zero rated goods and declared supplies amounting to Rs.694.170 million to unregistered persons from April, 2011 to April, 2012 without payment of sales tax amounting to Rs. 34.708 millions, depriving the exchequer of its legitimate revenue at 6 per cent or 4 per cent or 5 per cent as per SRO-283/2011

During the course of inquiry, four suppliers namely M/s Yarn Solution, M/s Gogan Enterprises, Ayesha Impex and Impex International provided details of bank transactions with S G Impex, STRN-1703210000528 which revealed that there was another unit registered with the income tax department namely M/s S G Impex vide NTN-576874-3. 

Inquiry reveals that tax fraud is committed whereby; invoices were issued in the name of S G Impex STRN-1703210000528, NTN-2576874-3. Whereas for compliance of  section 73 of the Sales Tax Act, 1990, the payments are made through M/s S G Impex to four suppliers namely M/s Yarn Solution , M/s Gogan Enterprises, Ayesha Impex and Impex International. On verification, it transpired that M/s S G Impex having NTN-2576874-3, in the proprietorship of Muhammad Yaseen is fake unit and as per bank manager’s statement, Yaseen opened the account at the branch and visited only once. The business account was referred by Abdul Karim Pardesi, Jamal Hussain and Qamaruddin Khan of Pardesi Fabrics and Jamal Hussain is the contact person of the account and as per bank manager they are operators of this account. gation was under way.