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KARACHI: A textile unit, reportedly owned by political bigwigs, has committed around Rs 1.4 billion tax fraud by misusing Export Facilitation Scheme (EFS).

According to the details, the Directorate of Post Clearance Audit (North) headed by Director PCA North, Sami ul Haq under the supervision of DG PCA Chaudhry Zulfiqar Ali has caught massive misuse of EFS by a textile unit reportedly owned by political bigwigs that cost Rs 1.4 billion to the exchequer.

Sources said the said textile unit based in Khyber Pakhtunkhwa fraudulently acquired an EFS license with approval for Rs 16 billion imports. However, a thorough inspection by the Directorate of Post Clearance Audit (North) laid bare the egregious malpractices of the textile firm.

Despite having meager operational capacity, the company leveraged the EFS to import over 2000 metric tons of high-value fabrics but failed to meet export obligations and sold locally, robbing the national exchequer of steep duties and taxes.

Customs teams probing deeper suspect the fraud to be part of a cunning plot that manifested only months after the company’s registration in September 2023. Choosing to operate from a remote, under-regulated region, the textile unit worked swiftly to defraud Rs. 1.4 billion in just three months.

They said the textile unit cleverly navigated the supply chain, transshipping fabrics from Karachi ports to the Faisalabad Appraisement Collectorate for clearance and utilization in the so-called factory in KP (FATA area). However, no records exist of the fabrics reaching the KP factory, indicating they were sold domestically in Faisalabad itself.

Furthermore, they said that the potential fraud could have reached Rs 16 billion over time - the value of the EFS license granted. Timely intervention by the PCA North capped the current loss at Rs 1.4 billion, saving further bleeding of government revenue.

After issuance of audit observation, PCA North referred the case to the Collectorate of Customs (Appraisement), Peshawar for lodging of FIR and joint investigation.

They said the customs formations were on high alert to preempt future imports of the fraudulent entity, and two teams were dispatched to arrest the culprits and their associates to recover the government revenue.

Sources said that this high-stake joint investigation by PCA North and the Peshawar Appraisement has spotlighted significant risk factors inherent in the EFS Scheme and the ramifications of this discovery may redefine the regulatory measures and shake up enforcement protocols within the export sector.

Copyright Business Recorder, 2024

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Truthisbitter813 Feb 21, 2024 11:13am
name of the textile unit?
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