FAISALABAD: The Directorate of Intelligence and Investigation (Inland Revenue), Faisalabad, has detected a dummy unit allegedly involved in million of rupees tax fraud.
The directorate has unearthed a scam of issuing/adjusting fake and flying invoices involving tax fraud of millions of rupees.
On a tip-off, the IR section initiated a probe into the issue and found M/s Arrow International involved in tax fraud.
Subsequently, a case has been registered against the firm, its buyers, suppliers and other beneficiaries under section 37A of the Sales Tax Act, 1990.
The investigation revealed that M/s Arrow International is a non-existent and a dummy unit, which was registered for the purpose of issuance of fake/flying invoices and to facilitate buyers and suppliers to avoid payment of due sales tax.
The probe showed that the firm was registered for the purpose of sales tax in 2017 with major activity of “whole sale and retail trade, repair of motor vehicles and motorcycles/wholesale of household goods/wholesale of textiles, clothing and footwear”.
The income tax returns filed by the firm for tax year 2016, 2017 and 2018 revealed that the registered person filed “Nil” returns for 2016 and 2017 and declared taxable income of Rs385,400 for 2018 with a business capital of Rs920,243 only. Whereas the sales tax profile of the registered person revealed huge bogus supplies of Rs1.4 billion during the period of February to October 2017 but the firm did not pay a single penny in the national exchequer during this period.
Moreover, the registered person also declared fictitious purchases amounting to Rs1.3bn from 65 different textile units to facilitate them to avoid the payment of due tax.
The firm, its buyers and suppliers and other beneficiaries have been found involved in millions of rupees tax evasion.
Further investigations are under way.
