ISLAMABAD, June 23: Sales tax, customs and federal excise duty evasion of more than Rs7 billion has been detected.
According to an audit report released here on Saturday, 84 out of 144 refund cases were processed without consulting sales tax automated refund repository (Starr) system installed for refund claims and in some cases by overruling the findings of Starr.
The taxpayers involved in the business of fake invoices caused a loss of Rs1.209 billion and failure of the recovery section to collect sales tax as a result of quasi-judicial proceedings in 303 cases resulted in a net loss of Rs2.4 billion.
The report of the auditor general of Pakistan for 2004-05, presented before the parliament, revealed that the collectorate of sales tax did not perform its core responsibility to demand and recover sales tax of Rs1.333 billion from 165 taxpayers.
Under the income tax audit, the realisation of income tax in 17 cases due to incorrect apportionment of common expense led to a loss of Rs44.804 million and in 38 cases of limited companies the short realisation of taxes caused a loss of Rs36.557 million to the kitty.
Incorrect income tax rate was applied in 160 cases resulting in short levy of Rs61.661 million.
The workers’ welfare fund was not paid by 198 assessees and the assessing officers concerned did not take notice of a default of Rs79.988 million.
Under the indirect taxes, the timely legal action was not initiated for recovery of central excise duty of Rs128.578 million. Surcharge was not levied on customs dues in 44 illustrative cases of imported goods that remained warehoused beyond stipulated period causing a loss of Rs111.137 million.
The government dues of Rs61.404 million were not collected due to failure to encash financial guarantees and ineffective monitoring system for disposal of imported goods led to blockage of Rs26.412 million revenue in 65 illustrative cases in which imported goods were not cleared within the prescribed period of one month.
The report says the audit of sales tax was conducted on test check basis which resulted in audit observations involving Rs676.643 million and test audit of customs duty cases led to audit observations involving Rs32.019 million and audit of central excise involving Rs108.670 million.
The gas development surcharge amounting to Rs457.700 million was not realised on sale of gas to the Water and Power Development Authority (Wapda) and there was short realisation of government dues amounting to Rs12.710 million in Islamabad Capital Territory due to non-recovery of excise duty, refund of time-barred claims, non-realisation of token tax and short realisation of stamp duty.
