ISLAMABAD: The Public Accounts Committee (PAC) Thursday referred two tax fraud cases involving over Rs6 billion to the National Accountability Bureau (NAB) for investigation of tax evasion and illegal exemptions/concessions availed by two companies.
Rana Tanveer Hussain, chairman of the PAC took the decision after declaring the Federal Board of Revenue (FBR) response as unsatisfactory in the matter of the Chahat Food Industries Limited.
The PAC chairman stated that it is a clear case of tax fraud and grossly misused facility under Section 65D of the Income Tax Ordinance 2001.
It is not clear that how the exemption certificate was issued despite, no manufacturing activity or fulfillment of laid down conditions for seeking such exemptions.
Even the machinery is not installed at the given address but industrial raw materials to the tune of billion were imported without any check by the tax department.
The Auditor General of Pakistan (AGP) team’s visited head office and factory’s premises at Lahore and Vehari for verification and found no manufacturing activity.
The company availed illegal exemption under Section 65D of the Income Tax Ordinance 2001, inadmissible input tax and tax credits.
The company was registered in 2016 and started operations in 2018.
During the last three years, there is no physical verification of the company and refunds were determined in connivance with the tax officers.
On the basis of physical verification and available record, this is an established fact that the said company does not carry out any manufacturing activity.
The AGP suggested that a detailed probe needs to be carried out for the exact determination of revenue loss caused to the government exchequer, Director General AGP added.
FBR Chairman Asim Ahmad, Thursday, informed the PAC that the FBR has no objection in sending two tax fraud cases to the NAB for investigation.
Copyright Business Recorder, 2021
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