Customs uncovers Rs218 million tax evasion by fake company

The Directorate of Customs Post-Clearance Audit (PCA) South has uncovered a major tax evasion case involving Suleman Industries, a company that falsely claimed tax exemptions through a fake manufacturing operation, The Express Tribune reported. 

Legal proceedings have been initiated, with a case registered against the company.

Director of Customs PCA South, Shiraz Ahmed, confirmed that the company’s suspicious activities came to light during a routine investigation into business operations. The audit team examined the company’s business practices and identified several discrepancies in the available data from the Customs, Sales Tax, and Income Tax departments.

Upon physical inspection of the company’s registered manufacturing site, investigators found no machinery or required manufacturing facilities at the address provided. 

Despite this, Suleman Industries had been claiming tax exemptions and concessional rates based on its alleged manufacturing status.

Further investigation revealed that the company had been selling imported embroidery machinery and other goods locally at concessional tariffs. The volume of imports did not match the company’s financial capacity, raising suspicions of potential money laundering. 

The total evasion amounted to Rs218 million in duties and taxes, with the company importing embroidery machinery worth Rs2.4 billion under 135 goods declarations.

Additionally, the inspection revealed that the company’s registered manufacturing location housed fake rented units, with no machinery and electricity bills showing no sign of manufacturing activity.

The PCA South has registered a case under the Customs Act of 1969 and is pursuing potential charges of trade-related financial crimes under the Anti-Money Laundering Act, 2010.