KARACHI: The Post Clearance Audit (PCA) South has detected a significant case of fiscal fraud involving the fraudulent enterprise, M/s Fazal e Rabbi Enterprises Lasbella, Hub. The fraudulent enterprise, which is not only fake but also physically non-existent, successfully acquired Export Facilitation Scheme (EFS) authorization to defraud the national exchequer.
The PCA audit team initiated this investigation following a tip-off regarding the misuse of EFS exemptions by the alleged enterprise. The team promptly visited two locations—one in Karachi and another in Lasbella, Hub district—where M/s Fazal e Rabbi Enterprises was purported to be operating. However, their investigations revealed that other businesses had been functioning at both addresses since long. These businesses confirmed that M/s Fazal e Rabbi Enterprises had never existed at the specified locations.
Further scrutiny of the importer’s registration profile uncovered that the entity had registered a bogus Karachi-based address on its National Tax Number (NTN) and Sales Tax Registration Number (STRN) certificate. Despite being registered in Karachi, EFS authorization was fraudulently acquired from Customs Collectorate of Gawadar based on yet another fictitious address located in Lasbella, Hub, which was not even mentioned on the NTN/STRN certificate.
Customs WeBOC data revealed that the fraudulent EFS user never made anh exports since the acquisition of EFS authorization; while import goods worth Rs 208 million had been pilfered under EFS, resulting in the evasion of duty taxes amounting to Rs 140 million. The income tax returns of the fraudulent entity indicated very poor financial worth, yet it transferred illicit funds worth Rs 208 million abroad against illegal EFS-imports.
Led by DG PCA Chaudary Zulfiqar Ali and Director PCA South Sheeraz Ahmed, the PCA teams have been instrumental in unearthing this elaborate scam. PCA South has officially lodged a First Information Report (FIR) and formed two teams to apprehend the accused individuals and their collaborators.
There are growing concerns regarding widespread misuse of the EFS regime, which is leading to significant losses for the national exchequer. The Federal Board of Revenue (FBR) has taken serious notice of these developments and is committed to addressing the issue of EFS scheme misuse. The FBR has intensified efforts to combat tax frauds, leaving no stone unturned in its mission to safeguard national financial interests. With special teams mobilized and the investigations accelerating, the FBR is determined to bring all culprits to justice. Chairman FBR and his team are unwavering in their commitment aimed at safeguarding the nation’s economic well-being, and sending a strong message to potential tax fraudsters.