ISLAMABAD: The Federal Board of Revenue (FBR) has recovered millions of cigarettes on which tax was not paid, and unearthed a tax evasion of more than Rs100 million by a tea maker.

According to an official statement issued on Friday, the FBR has started conducting raids against tax evasion on tea and cigarettes.

A team of the directorate of intelligence and investigation department of FBR’s Inland Revenue wing in Multan raided different premises and godowns located at Lutaf Abad (Bason Road), Shah Rukn-e-Alam Colony and Southern Bypass Road, and confiscated more than two million cigarette sticks on which duty had not been paid.

The directorate of Hyderabad, in its raids in Khipro and Umerkot, recovered nearly 2.5m cigarette sticks.

In all these cases, the FBR teams were not provided with any invoice for federal excise duty and sales tax or any evidence of the production or supply of the cigarettes. The cases are under investigation and the Directorate General is also tracing out the location of the origin of this trade.

A known tea manufacturer in Bahawalpur has also been found to have evaded taxes. On the basis of scrutiny of available record, the company has evaded taxes through four techniques: first, it short-paid sales tax by an amount of Rs2.893m; second, by non-payment of sales tax amounting to Rs2.585m on disposal of fixed assets; thirdly, by claiming inadmissible sales tax amounting to Rs17.098m deducted by withholding agents; and fourth, by illegal input tax adjustment of Rs49.207m.

After calculating penalty and default surcharge, the total tax liability reached Rs100.513m. The taxpayer agreed to pay the evaded amount of sales tax along with penalty and default surcharge to avoid criminal proceedings.

The taxpayer has also deposited the tax liability of Rs100.513m through six different sales tax payment challans.

Published in Dawn, April 29th, 2017