- Use of fake/flying invoices to commit sales tax fraud increases after facilitation, automation and easy ways to get sales tax registrations
ISLAMABAD: The estimated sales tax amount evaded through the fraudulent use of flying invoices (irrelevant invoices) would be approximately Rs 5-6 trillion.
Sources told Business Recorder that the use of fake/flying invoices to commit sales tax fraud has increased after facilitation, automation and easy ways to get sales tax registrations.
The quantum of sales tax fraud through the “flying invoices” has not decreased after automation. In the name of facilitation, now it is easy to get sales tax registration.
The use of fake invoices has been reduced due to system checks, but the phenomenon of flying invoices has been increased. The estimated amount of sales tax evaded with the help of flying invoices comes to the tune of Rs 5-6 trillion, sources said.
Flying invoices have been used in different cases. There are cases where the input is completely registered but the output is un-registered within the supply chain. On the other hand, there are cases where the output is registered but the input is not registered.
Fake units are registered with the FBR to carryout paper transactions. The fraudsters file fake sales tax returns of dummy firms and claims illegal input tax against bogus invoices. The fake/flying invoices have been used to claim inadmissible refunds/input tax adjustments, causing massive revenue loss to the national exchequer.
The investigating agencies of the Federal Board of Revenue (FBR) are arresting inter province gangs of fake /flying sales tax invoice mafias involved in such scams causing huge revenue loss to national exchequer.
Copyright Business Recorder, 2023