KARACHI: In another startling crackdown on corporate fiscal fraud, PCA North has uncovered a massive evasion of Rs 1 billion, as detailed in a recently filed FIR.
M/s Khyber Fabrics Embroidery, bearing the National Tax Number (NTN) 4451931-5, is implicated in fabric imports totaling an astonishing Rs 3.7 billion. Claiming FATA/PATA exemptions, this firm pledged to channel the imported materials solely within the FATA PATA region’s boundaries.
However, upon receiving reliable tip-offs, PCA North’s audit team swung into action. The results were staggering: it was discovered that M/s Khyber Fabrics Embroidery was unlawfully selling exempt (FATA PATA) goods in the nation’s commercial hubs, blatantly violating the exemption facility.
During a surprise audit, the supposed bustling manufacturing site located in Sabal Bahty, Bara Bazaar, Khyber, was devoid of any substantial manufacturing activity. The so-called “factory” was home merely to two stitching machines, a trivial stock of polyester pile fabric (only 4 rolls), and a couple of workers who bore no documentation to elucidate the handling of the imported fabric worth Rs 3.7 billion.
The importer was presented with an opportunity of defence and to provide cogent evidence of consumption and legal sales of manufactured goods as well as corresponding utility bills and labor records, but the importer failed to comply.
The inescapable conclusion was that the importer had been exploiting the FATA PATA exemption for nefarious gains through the illegal sale of high-end fabrics. Consequently, an FIR was lodged against the operators of M/s Khyber Fabrics Embroidery for this fraudulent misuse of tax exemptions and subsequent illegal sales.
To bring the culprits to justice, PCA North has formed special task teams to apprehend the accused proprietor of the embroidery firm.
This incident casts a grim shadow on the practices of importers within the FATA /PATA region. Sources suggest a pervasive pattern among business entities to abuse the FATA PATA exemption, dealing in many items such as steel, tea, and fabrics, and covertly funneling these commodities into the markets, resulting in staggering monthly tax revenue losses for the state which run into billions.
PCA North’s ongoing vigilance is a stark reminder of the relentless pursuit of tax justice, ensuring that those who flout the law will face the music. With this high-profile case lodged, a stark message is clear: fiscal fraud on a monumental scale will not go unchecked in the region.