KARACHI: The Post-Clearance Audit (PCA) South Directorate unearthed serious discrepancies relating to the Statutory Regulatory Order (SRO) 492. The revelation came in February 2024 when auditors detected glaring inconsistencies in the enforcement of SRO 492. The scheme was systematically abused, resulting in an extensive evasion of duties / taxes due to the non-fulfilment of export obligations.
In response to the audit findings, a meticulous physical verification and stock taking exercise was initiated. Two importers namely, M/s Iqra Enterprises and M/s Ansari Textile were found physically non-existent at their registered addresses, thus committing fiscal fraud, while claiming illegal exemptions of duty / taxes under SRO 492.
M/s Ansari Textiles imported fabric under 02 import GDs in August 2019 by illegally claiming SRO 492 exemption. The importer also failed to make any exports thereafter, thus evading duty/taxes worth Rs 114.8 million. M/s Iqra Enterprises, on the other hand, imported fabric and PU leather under 13 import GDs between August 2020 and January 2022, but failed to export any goods. Apart from abusing SRO 492, M/s Iqra Enterprises also violated the 8th and 12th schedules of the Sales Tax Act, cumulatively evading duty / taxes worth Rs 105.7 million. Collectively, both culprits caused a loss of Rs 220.5 million to the national treasury.
M/s Ansari Textile had also been implicated by Customs Exports Port Qasim Collectorate in 2021 for active involvement in narcotics trafficking. The ongoing case highlights the company’s reckless disregard for legal trade practices. In a parallel thread, M/s Iqra Enterprises has been identified as a facade, a dummy unit camouflaging the real perpetrators behind its suspicious operations. Special investigative teams have now been formed to identify the actual masterminds orchestrating these tax evasion schemes.
To address these fraudulent operations, the PCA South has registered two First Information Reports (FIRs), with robust legal measures anticipated to follow as the authorities aim to ensure strict compliance with the nation’s tax regulations. PCA team, under the supervision of DG PCA Chaudary Zulfiqar Ali and Director PCA South, Sheeraz Ahmed, is poised to take decisive action to curb such fraudulent activities and retrieve the lost state revenues. This detection by PCA South underscores the need for continuous monitoring mechanisms and timely audits to ensure compliance with customs procedures and safeguard Pakistan’s economic interests.