PESHAWAR, July 23: Government agencies have started investigating suspected cases of fake sales tax refund paid to exporters during the last couple of years. Fresh inquiries began following the registration of fraud cases by the Regional Tax Office (RTO) against two exporters from the NWFP last month, sources told Dawn here on Monday.

Internal auditors of the RTO, Customs Intelligence and Investigation Wing of the Federal Board of Revenue (FBR) and the National Accountability Bureau (NAB) were investigating such cases, sources said.

The RTO Peshawar had lodged FIRs against the two exporters last month for producing fake documents to claim Rs591 million as sales tax refund. Officials explained that one of the two cases carried a fraud of Rs550 million and the fresh cases being probed involved even bigger sums of money.

Irregularities and embezzlement worth millions of rupees had recently been reported mainly in sales tax refund on exports to Afghanistan, where some exporters in connivance with tax officials had inflicted huge losses to the national exchequer, officials explained.

Following inquiries, the volume of payments as sales tax refund from the Peshawar-based RTO drastically reduced during last six months, officials said.

The Peshawar-based defunct Collectorates of Sales Tax paid Rs1,616 million as refunds to exporters for exports to Afghanistan during January-July 2006 followed by Rs1,600 million paid in the subsequent six months.

However, the clearance of refund claims during January-June this year had declined substantially, as during this period around Rs500 million could be paid in this head, officials said. Officials attributed the decline in payments of refund claims to verification and investigative audits of refund claims during the last couple of months, which they said, had discouraged the filing of fake claims.

They argued that the ratio of pending refund claims was almost similar to the corresponding period of the last financial year, adding that by December 2006 the claims involved Rs700 million.