Customs Intelligence books two exporters for fiscal fraud

KARACHI: Directorate of Customs Intelligence and Investigation Karachi has lodged two FIRs against M/s Gulfaraz Fabric and M/s Taimoor Impex for mis-declaring the description and quantity of exportable goods, and claiming illegal refunds and rebate.

These are first two FIRs of this kind on fraudulent export units. After SRO 1125 was withdrawn, many fake companies emerged to make bogus exports and claim illegal refunds as rebate.

According to the details, information was received through Director Irfan Javed to Additional Director Sheeraz Ahmed that certain fraudulent units were operating as manufacturers of textile goods and making fictitious exports by declaring vague descriptions and exporting goods which did not actually belong to them, in order to acquire illegal tax benefits (duty drawbacks and sales tax refunds) on such fraudulent exports.

It was also learnt that a broker named Saleem was conniving with the proprietors of M/s. Taimoor Impex and M/s Gulfaraz Fabric to arrange exportable goods belonging to various registered/unregistered persons in Karachi which were then consigned for exports in the name of M/s. Taimoor Impex and M/s Gulfaraz Fabric, so as to enable the accused exporter to claim duty drawback and sales tax refund fraudulently.

Additional Director Shheraz Ahmed formed ateam under his own supervision comprising Deputy Director Adnan Rafique, Superintendent Fakhar Shah and IO Khayam to scrutinize PRAL data, which revealed that M/s. Taimoor Impex and M/s Gulfaraz Fabric, were regular claimants of both – sales tax refunds as well as duty drawback.

A check was kept on the export consignments of these exporters and the examination of their export consignments found they had declared vague descriptions, while several items in the consignment had not been declared.

When confronted, the Customs agent informed that the consignments did not belong to the above mentioned companies, but belonged to Karachi Kapra Market brokers. A broker Saleem had given the Form-E to the clearing agent with instructions to export the goods in the name of M/s Gulfaraz Fabric and M/s Taimoor Impex.

Investigations conducted by Sheeraz Ahmed found that the fictitious exporters were conniving with sales tax registered companies (who sell flying invoices), Kapra Market brokers (who arrange exportable goods) and hawala/hundi companies (who arrange foreign remittance) to rob the national exchequer by claiming illegal duty drawbacks and sales tax refunds.

Director Irfan Javed has appreciated Additional Director Sheeraz Ahmed and his team for detecting the fraud. It may be mentioned here that due to efficient performance of Customs, there has been a significant decline in the cases of revenue evasion and fiscal frauds.

An official said corruption had decreased considerable in Customs, Inland Revenue and several other departments, adding that the recent Transparency International report raises questions on the authenticity and fairness of this report.

According to this controversial report, Pakistan has slipped three more places on the Corruption Perception Index (CPI)-2019. Pakistan’s ranking dropped from 117 in 2018 to 120 out of 180 countries on the CPI-2019. Pakistan has not so far officially challenged the findings.

The official said it was possible that the report was issued to defame Pakistan and discourage investment in the country.

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