Tax evasion of Rs 95mn detected by FBR intelligence directorate in coal sector

Culprits apprehended for issuing fake invoices; 7 day physical remand granted by court

ISLAMABAD: Tax evasion worth Rs 95 million in the coal sector has been unearthed by the Directorate of Inland Revenue Intelligence & Investigation, FBR.

According to details, Directorate of Inland Revenue Intelligence & Investigation, Islamabad has arrested two persons under section 37A of Sales Tax Act 1990 in an effort to curb the menace of fake/flying invoices.

One way of evading taxes through fake invoices is that bogus companies, which exist only on papers, issue fake invoices. These companies then claim a refund from the sales tax department on raw material that was never purchased. Meanwhile, flying invoices are used by registered taxpayers to claim undue refunds from the FBR by showing excessive use of raw materials.

It was reported by reliable sources that an office was set up in a residential complex located in Sector F-10 of Islamabad. The office was involved in the making of fake invoices for coal, presumably being sent to cement factories.

The Directorate raided the office/flat and registered an FIR against an alleged tax fraudster for his involvement in tax fraud and causing a loss of revenue to the tune of ninety five million rupees to the national exchequer by claiming/adjusting inadmissible input tax on the basis of fake invoices. 

However, during the raid, the principal officer of the company could not be apprehended as he was not present in the office. Raids are being conducted in the search of the said person and he is expected to be arrested accordingly. 

The accused were presented before a special court in Rawalpindi on 27th September, 2023 for securing a 7-day physical remand which has been granted by the court for further investigation. It is expected that details of other culprits involved in fake and flying invoices could be revealed during investigation.

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