KARACHI: In a groundbreaking revelation, the Post Clearance Audit (PCA) South has uncovered a massive fiscal fraud amounting to Rs. 2.4 billion, allegedly orchestrated by M/s Qazi Sanjrani Enterprises (Pvt.) Ltd, a prominent cement unit based in Quetta. This unprecedented fraud involved the simultaneous misuse of four export exemption regimes: Manufacturing Bond, Duty and Tax Remission for Export (DTRE), Temporary Import (TI) under SRO 492, and the Export Facilitation Scheme (EFS), resulting in significant losses to the national exchequer.
The fraudulent activities came to light when the factory imported vast quantities of clinker and packing materials without adhering to the export requirements stipulated under these exemption schemes. Under the directive of Dr. Zulfikar Ali Chaudhry, Director General of PCA, Sheeraz Ahmed, Director PCA South, led the investigation into the suspected misuse of export facilitation regimes. Preliminary scrutiny by Appraising Officers Hafiz Muhammad Qasim Rabbani and Imran Saifi, based on customs and sales tax data, revealed several discrepancies, prompting a physical inspection of the factory premises on December 18, 2024.
The PCA audit team conducted a stock assessment and discovered that out of a total quantity of 463,334 metric tons (MT), only 62,000 MT of clinker was found at the factory. A staggering 395,000 MT, worth Rs. 3.3 billion, was missing, indicating that the goods had been pilfered and potentially sold in the domestic market. The importer failed to provide a plausible explanation for the missing goods.
During the stock-taking process, the importer claimed that 15,000 MT of clinker was stockpiled at Taftan and Gawadar dry ports. However, this assertion was found to be false, as no tangible evidence supported the claim, suggesting another layer of deceit. The importer had made substantial imports by availing exemptions but failed to make corresponding exports under the said schemes, despite the expiration of utilization periods for the Manufacturing Bond, DTRE, and SRO 492.
The PCA authorities calculated the total evasion of duty taxes to be Rs. 2.4 billion, with Rs. 369 million through the Manufacturing Bond, Rs. 222 million via DTRE, Rs. 91 million under Temporary Import of SRO 492, and a colossal Rs. 1 billion through EFS misuse. Additionally, a surcharge of Rs. 676 million was found recoverable due to the illegal removal and sale of exempt goods.
In response to this colossal fraud, the PCA authorities promptly lodged a First Information Report (FIR) for fiscal fraud under Section 32A of the Customs Act, initiating an in-depth investigation to uncover all accomplices involved in this intricate scam that had been ongoing since 2020.
The Federal Board of Revenue (FBR) has taken serious note of the massive misuse of export facilitation regimes by unscrupulous traders, which has caused significant losses to the national exchequer. The FBR has intensified efforts to combat tax frauds, mobilizing special teams and accelerating investigations to bring all culprits to justice. The Chairman of FBR and Member Customs are unwavering in their commitment to safeguarding the national economy and sending a strong message to potential fraudsters to preempt financial crime.
Pakistan remains vigilant and effective in plugging every possible chance of revenue leakage, ensuring the protection of the national economy.