Over 10,000 Goods Declaration forms tampered to evade billions in taxes, FBR orders audit

A large-scale scam involving the manipulation of over 10,000 Goods Declaration (GD) forms has been uncovered, revealing a coordinated effort between importers and officials at the Pakistan Single Window (PSW) to evade taxes amounting to billions of rupees.

According to a report published by The Express Tribune, the scam, which involved altering quantities and descriptions of goods in the GD forms, has raised serious concerns about the integrity of the customs system.

The GD form, which contains details about importing companies, agents, goods, and taxes, was once believed to be immune to alterations once filed online. However, it has now emerged that the system was exploited over several years. 

The scam was uncovered through log edits in the GD forms, revealing that corrupt officials at PSW facilitated the changes. 

According to the news report, the tampering was done without altering the Harmonised System (HS) code—the unique identifier for traded goods—making it harder to detect.

In response to this breach, the Federal Board of Revenue (FBR) has ordered a post-clearance audit of transhipment GD forms from fiscal year 2022 onwards. An FBR spokesperson confirmed the tampering, noting that while the HS codes and quantities were changed, physical and documentary scrutiny at dry ports still occurred.

Despite initial attempts to downplay the issue, the FBR has now ordered a thorough investigation into all affected GDs, focusing on both the original declarations at Karachi ports and the modified declarations at dry ports.

FBR Chairman Rashid Langrial has expressed his commitment to dismantling the corrupt network behind this fraud, and an inquiry has been launched to identify and hold accountable those involved. 

The tampering method involved declaring goods with both high and low customs duties, altering the quantities in a way that reduced the tax burden. For example, in one case, a consignment filed at Karachi was manipulated, reducing the quantity of a high-duty item while increasing the quantity of a lower-duty item. This allowed the importers to evade significant taxes, with individual cases showing losses of millions of rupees.

The FBR spokesperson assured that the issue has been rectified, and an audit is underway to examine the full scope of the fraud. If the audit reveals significant discrepancies, the FBR may extend the investigation back to 2015.

The case represents the second major scam involving the PSW in recent years, with the first uncovering a network of corrupt FBR officials and smugglers. Following that scandal, Prime Minister Shehbaz Sharif ordered an inquiry, which has already led to the involvement of high-ranking officials.