LAHORE: Federal Board of Revenue’s Directorate General Intelligence & Investigation-Inland Revenue, Lahore has detected a huge tax evasion of Rs96.15 million by Digital Links, a supplier of surveillance equipment.
The FBR Inland Revenue’s intelligence wing, on the basis of information that a supplier of close circuit cameras and other IT equipment is involved in sale and income tax evasion, took swift action and started investigation. The supply of above said taxable goods is subjected to normal regime of sales tax under section 3 of the Sales Tax Act, 1990.
The investigations revealed that the supplier was registered with Income Tax Department in 2014 as a retailer/supplier and filed tax returns for tax years 2012 to 2015 wherein turnover/sales of greater than Rs 5 million for each tax year was declared. A person having a turnover/sales of Rs 5 million or above during a year, is required to get sales tax registration as per Sales Tax Act, 1990.
Search of the supplier’s business premises led to recovery of private record/things which confirmed that taxpayer is involved in making taxable supplies without getting registration. It is established that the business concern in connivance with its suppliers, buyers and connivers etc has committed tax fraud by way of suppression of its actual sales and making of taxable supplies without getting sales tax registration. The business concern concealed its taxable supplies valuing Rs 229,520,682 and wilfully & fraudulently evaded sales tax amounting to Rs 38,277,911 by committing tax fraud.
The total recoverable tax amount is Rs96.2 million, said FBR officials. The amount includes a default surcharge of Rs19.6 million besides penalty of Rs38.3 million, which is equal to 100% of the principal tax liability. The authorities are now planning to expand the investigation to Digital Links suppliers and buyers in the hope of recovering taxes from them as well.
Moreover the Lahore Directorate approached the Local Registration Office, RTO-II, Lahore and ensures the compulsory registration of the business concern.
During the course of investigations, one of the partners of the said business, attended the Lahore Directorate and voluntarily agreed to deposit the total sales tax liability to avoid the criminal proceedings after depositing Rs7,526,768 and submitted the post dated cheques for the remaining amount.
