KARACHI In a groundbreaking investigation, the Post Clearance Audit (PCA) South has uncovered a monumental scam involving Rs 9.7 billion in tax evasion and money laundering within the iron and steel sector.
Led by Director Sheeraz Ahmed, PCA is playing a pivotal role in securing government revenue and identify unscrupulous elements.
The scandal is linked to nine fraudulent importers who exploited the “manufacturing status” to evade Rs 315 million in duty taxes.
The PCA South initiated a sector-based audit focusing on iron and steel imports, following reports of massive misuse. PCA South issued audit notices to the nine importers, however, all notices were returned by the courier company with remarks that the addresses were untraceable.Upon verifications by the PCA teams, it was confirmed that said nine importers were physically non-existent. Scrutiny of FBR database led to the discovery that these companies had transferred Rs 9.72 billion abroad while evading Rs 315 million in taxes through illegal exemptions availed by way ofmisuse of manufacturing status. The modus operandi of these importers indicated a well-orchestrated plot to siphon funds out of the country illegally. The importers falsely claimed exemptions and reduced rate of duty / taxes that was only allowed for manufacturing enterprises. The importers engaged in commercial sales of same-state iron and steel products while lacking any manufacturing facilities or business premises.
The scrutiny also revealed that said nine importers had very poor financial worth, as per their income tax declarations, which made financing such massive imports highly suspicious. Even more striking, three of the nine importers did not file income tax returns at all, thus substantiating Nil financial worth, while financing imports worth Rs 2.48 billion, showcasing a blatant money laundering scam.
Nine implicated importers include: Metal Toss(Pvt) Ltd, Unity Recycling Industry, The Material House, Fornax Icon (Pvt) Ltd, Metropolitan Steel Corporation Limited, Hasnain International, Khaleej Trading, H. B & Sons, Al-Hadeed Steel. The PCA teams are intensively probing to identify the real masterminds behind these fraudulent operations. With an aim to hold the true perpetrators accountable, the investigation is expected to uncover deeper layers of this intricate scam.Investigation will also cover as to how such companies managed to acquire manufacturing status registrations without having any physical existence at all.
Led by the DG PCA Chaudary Zulfiqar Ali and Director PCA South, Sheeraz Ahmed, dedicated teams have played a pivotal role in uncovering the depths of this fraudulent scam. Additional Director Attaullah Shabbir, Deputy Director Muhammad Sarfraz and Appraising officer Najeeb played instrumental role in the detection. With special teams mobilized and the investigations accelerating, the FBR is determined to bring all culprits to justice. This scandal serves as a stark reminder of the lengths to which criminal entities will go to evade taxes and launder money, posing severe repercussions for the economy. Despite pressures, the PCA South’s stern action highlights its unwavering resolve to take to task fraudulent elements to safeguard national economy. Their efforts are aimed at sending a strong message to potential wrongdoers to preempt recurrence of such crimes.