ISLAMABAD: The Federal Board of Revenue (FBR) Intelligence Wing foiled alleged attempts by a plastic manufacturer to deal a huge blow to the national exchequer though bogus sales tax refund.
As per details, the Directorate General of Intelligence & Investigation Inland Revenue (IR) was tipped off that a Peshawar-based plastic manufacturer was attempting to defraud the department of Rs800 million though bogus refund claims by misusing the provisions of SRO 180(I) 2011. It is to be noted that the provisions are pertaining to tax concession to the flood-affected areas of Khyber Pakhtunkhwa.
The department carried out forensic audit of the unit, data analysis, monitoring of import data, effective checking of the whole manufacturing process and also fought back the case at the judicial level.
Details revealed that that the manufacturing unit was set up at Gadoon Amazai Industrial estate, KPK, which only maintained a very limited manufacturing capacity but papers huge volume of manufacturing was claimed fraudulently to claim bogus sales tax refunds. During July, 2010 to May, 2013 this unit filed claims of sales tax refunds amounting to Rs812.807 million. Investigations carried out by the Directorate General of Intelligence & Investigation confirmed that the manufacturing unit was involved in selling the imported raw material in the market without going for manufacturing process. This fact was confirmed from the forensic analysis of the raw material imported by the manufacturing unit.
Forensic analysis carried out by the Directorate General revealed that the finished products declared by the manufacturing unit were not produced from the raw material imported by it. For example, the imported raw material was meant to be used in the manufacturing of such expensive products as body parts of home appliances like Air Conditioner body covers, Washing Machines body and Telephones Sets, surgical goods such as drips/bottles, syringes, stoppers and Plasticizers in paint, sealants and adhesives. Such expensive raw material was claimed to have been used by the manufacturing unit in production of cheap PVC pipes, shopping bags and low quality footwear.
The Directorate blocked the refund claims of the manufacturing unit and requested the Peshawar Regional Tax Office to analyse the refund claim in detail in the light of the facts surrounding the claims.
