Senate panel raises alarms over massive under-invoicing in Sindh solar energy project

The Senate Standing Committee on Economic Affairs expressed serious concerns on Wednesday over a fresh episode of massive under-invoicing for tax evasion and trade-based money laundering involving the import of solar kits under the Sindh Solar Energy Project (SSEP), Dawn reported. 

The report, presented to the committee by the Federal Board of Revenue (FBR), uncovered serious irregularities in the import of solar home system kits. It revealed that contractors declared unit prices for the kits ranging from $16 to $23.4 for tax purposes, while the World Bank paid up to $112.44 per unit for the same kits, showing a price difference of $89 to $96 per unit.

Investigations into tax evasion, money laundering, and violations of foreign exchange regulations are currently underway.

The report outlined that M/s Beyond Green, Karachi, imported 10 consignments of 200,968 solar kits between December 2024 and July 2025, using clearing agent M/s Vista Impex. The solar kits were declared under HS Codes 8501.7210 and 8501.711, attracting zero customs duty, 18% sales tax, and 3% additional sales tax. 

However, a subsequent verification process revealed that the goods declarations submitted to the Sindh government were either fake or tampered with.

Further investigation revealed that the same kits were supplied to the Sindh government at significantly higher prices. Official contracts for the SSEP indicated a price of approximately $112.44 per kit, with the World Bank making direct payments to the supplier, M/s Shenzhen LEMI Technology Development Co Ltd, China. 

The price declared for tax purposes was found to be $103.08 per unit, leading to the issuance of show-cause notices and the forwarding of 10 contraventions to customs adjudication authorities.

In addition to the discrepancies in pricing, the report also revealed the generation of fake invoices worth $12.5 million, and the routing of third-party remittances through UAE-based entities, raising concerns over trade-based money laundering and violations of foreign exchange laws. 

The matter has been referred for proceedings under the Anti-Money Laundering Act 2010, and a comprehensive sales tax audit has been recommended.

The committee was informed that, despite the SSEP’s implementation period ending on July 31, 2025, approximately 30,000 solar kits out of 200,000 had not been distributed within the planned timeframe. These kits are now being handled through a separate arrangement.

Following the discovery of these discrepancies, the Sindh cabinet referred the matter to the Enquiries and Anti-Corruption Establishment (EACE) on December 1, 2025. A forensic audit has been approved and is currently underway, with the National Accountability Bureau (NAB) also investigating the case.

Committee Chairman Saifullah Abro raised concerns about the lack of suspensions for the officials involved and directed that a letter be sent to the Chief Minister to ensure accountability for those responsible.