KARACHI: Federal Tax Ombudsman (FTO) Asif Mahmood Jah has asked the Federal Board of Revenue (FBR) to conduct a comprehensive investigation of a mega scam of billions of rupees in the form of fake sales tax supplies in the cement sector, a statement said on Saturday.
FTO unearthed the scam while investigating a complaint of a cement retailer who had disowned a huge supply of cement from two suppliers who had showed the supplies to the complainant at the time of filing their sales tax return.
According to details, the complainant reported the case to regional tax office (RTO) Abbottabad, however, no action was reportedly taken to remove his entries from MIS record, IRIS.
The complainant took up the matter with the FTO.
During the investigation, chief commissioner IR, reported that sales tax return of the complainee company were examined, which revealed that the registered person had made sales to the complainant as unregistered buyer since the registered person was dealing in Third Schedule item. No sales tax or further tax was involved in the instant case.
The commissioner added that tax profile of the complainee company had been scrutinised on findings that during the complaint period i.e July 2019 to July 2O21, the registered person had made sales amounting to Rs6.8 billion and sales tax involved was amounting to Rs1.22 billion.
As per IRIS record, the complainee company was selected for audit under Section 177 of the Income Tax ordinance, 2001 for the tax year 2016 and 2019. Audit proceedings for the Tax Year 2016 have been finalised under Section 122 (1) of the Income Tax ordinance, 2001 and tax demand amounting to Rs694 million has been created.
However, audit proceedings for the tax year 2019 are pending. Therefore, during the audit proceedings content of complaint shall be kept in mind and would be finalised under the relevant provisions of law, the record revealed.
In view of the above stated, FTO recommended the FBR to conduct an incisive investigation regarding the allegations leveled and surfaced during the complaint, especially with reference to conduct of the complainee companies.
He also asked the directorates of I&I-IR to conduct similar exercises in their respective jurisdictions with reference to high turnover sectors such as cement, sugar, steel, cigarette, beverages and fertilisers.
RTO, Abbottabad was directed to take corrective measures in complainant’s MIS record of IRIS in light of the findings of the investigation.