PAC questions Rs5b tax concessions on food import

ISLAMABAD: The Public Accounts Committee (PAC) on Thursday forwarded the cases of two companies involved in tax fraud amounting to billions of rupees to the NAB.

A PAC meeting was held with Rana Tanveer Hussain in the chair in which a report of the Federal Board of Revenue regarding tax evasion and initiation of criminal proceedings with reference to tax refund scam worth Rs6 billion in Multan and a report of the Auditor General of Pakistan relating to factual position/operation of M/s Chahat Food industries availing tax concessions under various heads were examined. The examination of appropriation accounts for 2018-19 of the Ministry of Housing and Works were also examined.

During the meeting, the DG Audit informed that on the instructions of the PAC, an inquiry was held regarding M/s Chahat Food Industries and Usman Trade Linkers Multan. Audit officials informed the committee that it was found out that M/s Chahat Food Industries taking advantage of tax concessions imported oil worth Rs6 billion without setting up an industry, sold it in the market and committed tax evasion of millions of rupees in income tax and sales tax.

FBR officials told the committee that a notice was issued to the company but the company approached the court and now the matter is in the court.

On the query of the PAC with regard to name of the company owner, the FBR officials avoided giving the name, saying that they could not reveal the name of tax defaulter due to the law. PAC Member Ayaz Sadiq questioned under which law the FBR revealed the name of Justice Qazi Faez Isa. PAC Member Senator Talha Mehmood said the name of the company owner is Rana Arif and he is involved in tax default of over Rs 5 billion.

It was informed that the auditor raided the factory premises but there was a cold storage instead of the factory. It was informed that a raid on the company's offices in Faisal Town revealed that tenants were residing there.

Rana Tanveer said people involved in this fraud have also tried to put pressure on him.

The committee members recommended that the matter be referred to the NAB, on which Rana Tanveer referred the matter of causing loss to the national exchequer by M/s Chahat Food Industries and the case of tax evasion of Rs 6 billion of Usman Trade Linkers Multan to the NAB.

While examining appropriation accounts for 2018-19 of the Ministry of Housing and Works, the PAC directed PWD authorities to investigate the issue of budget lapses for widows and children of employees who died. The PAC also took notice of lapse of grant of over Rs 330 million and remarked that it seems the ministries are lacking financial discipline and supplementary grants are taken in every matter.

The officials of the Ministry of Housing and Works told the committee that the ministry did not receive this grant as only allocations were made but money was not released.