KARACHI: The Directorate Intelligence and Investigation (DI&I), Inland Revenue (IR), Karachi, has apprehended two suspects believed to be part of a sprawling network responsible for causing a colossal revenue loss to the exchequer through fake and flying sales tax invoices.
As part of an ongoing nationwide crackdown on this illegal activity, which has resulted revenue loss in billions, the Directorate has taken swift action, detaining the individuals and filing First Information Reports (FIRs) against them.
One of the primary suspects implicated in the scam was presented before the Court of Special Judge (Custom & Taxation) in Karachi.
The suspect has been remanded in custody for a period of seven days. During the initial stages of the investigation, the suspect provided crucial information that led the Directorate’s team to a prominent advocate’s office and tax consultancy firm in an upscale area of Karachi, duly authorized by a court search warrant.
The subsequent search operation, conducted meticulously by the Directorate’s team, uncovered a wealth of significant evidence, shedding light on the extensive fraudulent activities taking place within the premises.
The recovered evidence included pre-signed blank and unsigned cheque books from various firms, an assortment of rubber stamps representing different companies, bank deposit slips indicating substantial cash amounts, physical copies of sales tax returns and invoices, as well as digital records stored on a laptop and computer.
The investigation took a compelling turn when a second suspect, linked to the previously apprehended individual and involved in the supply chain of fake and flying invoices, was also taken into custody during the search.
This development prompted authorities to produce the second accused before the court, which granted a five-day remand.
A thorough examination of the records and data from delinquent firms revealed that a significant number of registered businesses had illicitly exploited these fraudulent invoices to claim excessive sales tax credits, substantially reducing their tax liabilities.
Shockingly, the interrogation of the arrested individuals exposed the active participation of prominent business entities and limited companies nationwide in this deceitful activity.
Determined to uphold the rule of law, the Directorate’s investigators are diligently scrutinizing the records and seeking assistance from other agencies to uncover the full extent of the scam.
Initial scrutiny of technical data from the FBR’s IRIS Portal indicates that this operation extends beyond Karachi, with numerous firms registered within its jurisdiction but regularly filing sales tax returns from different cities in Punjab, particularly Faisalabad.
This elaborate scheme has resulted in billions of rupees in undue tax credits for organized business sectors, depriving the national exchequer of its rightful revenue.
To shed further light on the intricate network of perpetrators involved, forensic analysis of computer data is currently under way, with officials hopeful that it will unveil more culprits connected to this heinous scam.
In a strong message to businesses and traders, the Directorate has emphasized its commitment to zero tolerance for such illegal activities. It has warned against engagement with unscrupulous elements and urged compliance with the law. The Directorate leaves no room for doubt that anyone found involved in the fake and flying invoices activity will face the full force of the nationwide crackdown.
The Directorate has swiftly communicated its preliminary report to its headquarters in Islamabad, urging similar action against users of illegal fake and flying invoices throughout the country.
It is believed that robust enforcement against these fraudulent practices will yield positive outcomes, strengthening the revenue collection efforts of the FBR in the days to come.
Copyright Business Recorder, 2023
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