Rs 9.7 billion money laundering uncovered in iron and steel imports

A money laundering scandal worth Rs 9.7 billion has been uncovered in the iron and steel sector, involving nine importers who manipulated their “manufacturing status” to evade taxes and illegally transfer funds abroad. 

As per a news report, the Post Clearance Audit (PCA), South initiated a sector-based audit focused on iron and steel imports, which led to the discovery of this large-scale scam. 

The nine importers exploited their manufacturing status to evade Rs 315 million in duty taxes while transferring Rs 9.72 billion out of the country.

Audit notices issued to the importers were returned as undeliverable, with the addresses provided being untraceable. Subsequent investigations by PCA teams confirmed that these companies did not physically exist. 

The PCA teams, led by Director General Chaudhry Zulfiqar Ali and Director PCA South Sheeraz Ahmed, are now intensively investigating to identify the masterminds behind these fraudulent operations. 

The importers falsely claimed exemptions and reduced duty rates intended for manufacturing enterprises, while in reality, they were engaged in commercial sales of iron and steel products without any manufacturing facilities or business premises.

Further scrutiny revealed that these companies had minimal financial worth according to their income tax declarations, raising suspicions about how they financed such large-scale imports. Notably, three of the nine importers did not file income tax returns at all, despite financing imports worth Rs 2.48 billion.