FBR unearths Rs86 million tax evasion scam in Karachi

KARACHI: The Federal Board of Revenue (FBR) exposed a massive tax evasion scam in Karachi through under-invoicing, ARY News reported.

According to the FBR spokesperson, the tax fraud detected by the Intelligence and Investigation Wing of FBR exposed the tax fraud through under-invoicing involving a popular cement factory.

The investigation revealed that the cement factory tried to evade sales tax worth Rs86 million by presenting fake invoices. After the scam, the FBR’s I & I wing expanded the investigation and recovered the amount of evaded sales tax.

Lucky Cement’s statement

Lucky Cement Limited later issued a statement addressing the allegations involving a company named “Al Abbas Traders” and its issuance of fake invoices to “ZA Choice,” which supplied coal to Lucky Cement.

“Lucky Cement Limited emphasizes its unwavering commitment to compliance with all tax regulations and procedures. The company has consistently purchased coal solely from vendors registered with the Federal Board of Revenue (FBR) and listed under the active category. As part of our diligent efforts to ensure compliance, we also obtained copies of the sales tax returns submitted by our suppliers, against which input tax was claimed. The recent issues have highlighted a failure in FBR systems to detect noncompliant sellers, resulting in undue scrutiny and harassment of compliant taxpayers like Lucky Cement Limited. The company has always been a significant contributor to the national economy, providing substantial tax and export revenues,” reads the statement issued by Lucky Cement.

We assert that the I&I officials of FBR have not produced any evidence of wrongdoing by Lucky Cement Limited. We view these allegations as baseless and a threat to the integrity and goodwill of our company. Consequently, we are exploring appropriate legal measures against such unlawful attempts to extort undue amounts and tarnish our reputation.

Earlier this year, the Post Clearance Audit team (PCA-North) of the Federal Board of Revenue (FBR) exposed a massive tax evasion scam in the port city.

The investigation revealed that the goods worth Rs 3.7 billion were illicitly sold under the pretext of tax exemption for the Federally Administered Tribal Areas (FATA), and Provincially Administered Tribal Areas (PATA).

Notably, duty-free imported goods were illegally distributed beyond the designated boundaries of FATA and PATA, violating customs regulations.

The customs officials stated that the duty-free imported goods could be sold only within the limits of FATA, and PATA regions.

A case has been promptly filed, leading to the formation of dedicated teams aimed at apprehending the owner of the implicated firm.