Ghee unit found involved in Rs215m tax evasion

ISLAMABAD: FBR’s intelligence wing has unearthed alleged tax fraud worth million of rupees by M/S Ikram Yaqoob Oil Industries (Pvt) Limited for claiming tax credit/exemptions on the basis of declaring inaccurate particulars of income.
The FBR’s Intelligence & Investigation (I&I) Inland Revenues (IR) Peshawar Directorate has filed a case under Section 203(1) of the Income Tax Ordinance, 2001 for trail by Honourable Court.
According to details available with The News, M/s Ikram Yaqoob Oil Industries is a private limited company having its registered office located at Plot No. 7/2-B, Phase-I&II, Industrial Estate, Hattar and manufacturing facility at Plot No. 229/3, Sector No. 5, Korangi Industrial Area, Karachi. The company was incorporated on 07.10.2013, was registered with Income Tax authorities on 17.12.2013 and with Sales Tax authorities on 17.01.2014.
M/s Ikram Yaqoob Ghee Industries (Pvt) Limited applied to CIR, Zone-I, RTO, Abbottabad requesting for acceptance of their claim for entitlement to tax credit u/s 65D of the Income Tax Ordinance, 2001 for a period of five years on 12.12.2013 and submitted record/documents accordingly to RTO, Abbottabad.
Their claim was accepted vide letter No. 5627 dated 20.01.2014 and they were issued exemption certificate u/s 159 of the Income Tax Ordinance, 2001 for import of raw material to be used in production of ghee & vegetable oil in the newly established industrial unit.
In order to verify the genuineness of their claim, FBR’s I&1, IR decided to conduct investigation in the instant case for the period starting from date of incorporation till date to confirm their claim of having the required capacity and resources to consume the huge quantity of raw material imported by them in the declared business/manufacturing premises and to examine the requisite qualifications for set-up of new industrial undertaking as envisaged under Section 65D of the Income Tax Ordinance, 2001.
During investigation, it was proved that the taxpayer has consistently been presenting its case as a new industrial undertaking and furnished false documents to prove that a new building was constructed and new plant and machinery was installed.
This false statement is punishable under section 192 of the Income Tax Ordinance, 2001 with imprisonment of 3 years and fine or both.
The taxpayer while applying for exemption certificate mislead the department into believing that they qualify for tax credit u/s 65D and consequent exemption certificate whose revenue impact stands at Rs1.01 billion. Of the above, imports of Rs2,975.42 million have been made wherein unpaid tax u/s 148 stands at Rs215.85 million.
By declaring inaccurate particulars of its income, the taxpayer has availed undue benefit of unpaid tax at Rs215.85 million on false/fraudulent declarations which was in fact recoverable from the taxpayer u/s 148 at import stage and was supposed to be its minimum tax liability.
This deliberate act of mis-declaration of income and consequent loss of Rs215.85 million of income tax is punishable u/s 192A of the Income Tax Ordinance, 2001. The taxpayer by making misleading statement of constructing a new industrial undertaking while he had in fact presented an existing industrial undertaking as newly established unit has committed an offence which is punishable under section 192/192A of the Income Tax Ordinance, 2001.