FBR nabs two in Rs 10 billion tax fraud

LAHORE – In pursuance of the FIR No. 04/2011 dated March 26, 2011, registered by the Directorate of FBR Intelligence and Investigation Lahore, in tax fraud amounting to Rs 10 billion, the directorate has arrested another two culprits, namely Muhammad Azam Qadri and Ikhlaq Ahmad, involved in issuance of fake sales tax invoices for generating illegal input tax adjustment/refund.
The court of Special Judge Customs, Taxation and Anti-Smuggling, Lahore, on April 1, 2011, on having presented by the agency, granted seven day physical remand of the accused for further investigation. It may be reminded that the directorate had already arrested accused Khalid Mehmood, Khalil, Rana Saqeem and Rana Shahzad on the same charges. They are presently under physical remand for 10 days which was granted by the court on March 26, 2011.
It has emerged that arrested accused, along with other criminals, were involved in issuance of fake sales tax invoices, for generating illegal input tax adjustment/refund, on behalf of 144 dummy supplier registered persons making dummy transactions with recipient registered persons, primarily located at Lahore, Faisalabad, Gujranwala and Karachi but generally spread all over the country.
The new revelation has brought the till date detected total evasion to the tune of more than Rs.10 billion (approximately). The gangsters, who, earlier issued fake sales tax invoices to recipient registered persons for claiming illegal input tax adjustments, included Muhammad Azam, Ejaz Latif, Asif Hanif, Iftikhar Ali, Muhammad Fayyaz and others.
Muhammad Azam had already been arrested in case FIRs No.14/2010, 18/2010 & 04/2010, during previous investigations while new principal accused Ejaz Latif, involved in an earlier detected sales tax evasion to the tune of Rs.613 million, was arrested in the FIR No.25/2010 dated 30.11.2010. The warrants of arrest of absconding accused have already been issued by the Special Judge Customs, Lahore.
It has been learnt that the new detection of evasion of Rs 7.5 billion along with Rs. 2.5 billion earlier detected amount, bringing the total evasion to Rs 10 billion in one case, has raised serious questions amongst fiscal policy and tax regulators.