FBR seals two chutes at Safina Sugar Mills over track-and-trace violations

The Federal Board of Revenue (FBR) has sealed two chutes at Safina Sugar Mills in Lalian, District Chiniot, after the mill management failed to install the required Digital Eye cameras and Network Video Recorder (NVR) systems. The failure constitutes a violation of the track-and-trace requirements under the Sales Tax Rules, 2006, according to a statement.

As a result, the FBR team posted at the mill sealed the two chutes on Sunday and stated that operations would remain suspended until the required Digital Eye cameras and NVR systems are installed.

In sugar mills, chutes such as Donnelly chutes play a key role in moving crushed sugarcane (bagasse) between milling stages through gravity. They help regulate material flow to ensure a steady feed to rollers, maximise juice extraction, control throughput, and reduce blockages by maintaining optimal material levels, often supported by sensors and automated control systems.

The FBR has launched an enhanced production monitoring system for the sugar sector, following directives from Prime Minister Muhammad Shehbaz Sharif, after the start of the 2025–26 sugarcane crushing season.

Currently, five oversight mechanisms are in place: track-and-trace stamps, automated counters installed at hoppers to record the number of bags produced, video recording, digital eye counting, and the S-Track invoicing system for all sugar dispatches at the mills’ exit gates. 

In addition, FBR staff have been deployed at sugar mills to oversee production and monitor sugar sales. 

The effectiveness of the system is ensured through the deployment of FBR personnel at each mill, continuous monitoring via integrated CCTV cameras, frequent inspections by senior FBR officers, and random field checks conducted by the Inland Revenue Enforcement Network (IREN). The enforcement network is monitoring the supply chain end to end and verifying whether sugar is being sold to genuine distributors or diverted to hoarders.

The government has reiterated its zero-tolerance policy against tax evasion and non-compliance in the sugar sector. These actions form part of a broader effort to strengthen tax enforcement and safeguard government revenue.

The FBR stated that strict monitoring and swift enforcement will continue even after the close of the crushing season to ensure compliance with the law, recovery of due taxes, and uninterrupted supply of sugar to end consumers.