Exclusive: Tax fraud involving Rs 134 million unearthed


Naveed Miraj

ISLAMABAD, DEC 25 (DNA) – The Directorate of Intelligence and Investigation of Inland Revenue, Faisalabad has unearthed a big scam of issuing/adjusting fake and flying invoices involving tax fraud involving over Rs 134 million and an FIR has been registered against M/s Arrow International, and 65 companies which were buyers, suppliers and other beneficiaries of M/s Arrow International.

According the documents and the FIR available with the DNA, the case has been registered under section 37A read with section 2(37) of the Sales Tax Act, 1990 against M/s Arrow International, its buyers, suppliers and other beneficiaries involved in defrauding national exchequer from tax revenue of over Rs 134 million.

According to the documents, investigations in the said case revealed that M/s Arrow International is a non-existent and a dummy unit, which was registered for the purpose of issuance of fake and flying invoices to facilitate buyers and suppliers avoid payment of due sales tax including further tax by the companies involved in import/export, weaving, spinning, manufacturing of textile products.

The detailed investigations, according to the document revealed, that M/s Arrow International was registered for the purpose of sales tax in 2017 with primary activity of whole sale and retail trade, repair of motor vehicles motorcycles, wholesale of household goods, wholesale of textiles, clothing and footwear. “The tax returns filed by the said firm for the tax years of 2016, 2017 and 2018 revealed that the registered person filed “Nill” returns in the years 2016 and 2017 and declared taxable income of Rs 3 lac 85 thousand for the year 2018 with a business capital of Rs 9 lac 20 thousand only,” stated the documents.

According to further details the sales tax profile of the registered person of M/s Arrow International revealed huge “Bogus” supplies of worth over Rs 1.4 billion during the February 2017 to October 2017, but the firm did not pay a single penny in the national exchequer during this period. “M/s Arrow Arrow International also declared “Fictitious” purchases amounting to over Rs 1.3 billion from 65 different textile units in order to facilitate them to avoid the payment of the due tax.”

The DNA when contacted the officials of the Directorate of Intelligence and Investigation of Inland Revenue said that further investigations are still underway, which are expected to lead to busting a racket involved in issuing, adjusting fake and flying invoices.