FAISALABAD: The Federal Board of Revenue (FBR) has detected tax fraud of Rs52 million by three weaving units who were consuming the subsidised electricity but not showing their production and sale.

Owner of one of the weaving units was arrested on Thursday and the court gave his 11-day physical remand to the FBR investigators.

The Ministry of Energy through a notification No. (12(1)/2019) issued on Jan 1, 2019, announced the incentive of subsidised electricity for export-oriented sectors including the textile segment.

Asif Rafiq, the FBR Faisalabad chapter additional commissioner headquarters, told Dawn that the FBR started monitoring of various units which had been availing themselves of the subsidised electricity. He said officials had made liaison with different departments including the Faisalabad Electricity Supply Company and trade organisations to keep an eye on the fraudsters.

He said during October the officials detected irregularities by some weaving units which had been consuming the electricity but neither showing their production nor sales only to avoid the sales tax. He said a raid was carried out with the help of Fesco and they issued notices to them.

During calculation, he said we found that three units including Khalid Mehmood Power Looms, Chak 66-JB Dhandra, Jhang Road, Irfan Weaving Factory and Ali Ahmed Weaving Factory consumed plenty of units.

Describing modus operandi of these units, he said they had been using the subsidised electricity but did not show their production or showing their units closed so that they could avoid taxes. He said the matter of these units was referred to the adjudication officer who gave them opportunity of hearing.

The tax evasion amount of these three units is Rs52 million which has been established through the adjudication, he added.

At the FBR Faisalabad chapter, he said a special cell had been established to curb the menace of tax fraud and fake and flying invoices trend. A couple of weeks ago, he said we had detected millions of rupees fake and flying invoices fraud and succeeded in arresting a culprit.

He said the owners of Irfan and Ahmed Weaving units were still at large and raids were being conducted to net them. He said the facility of reduced rate tariff was extended even after withdrawal of zero-rated regime to support textile industry across the country. The reduced rate facility played a pivotal role to revive the export-oriented textile industry, he said, adding that such elements were misusing the incentive which would not be tolerated as different teams were working to keep an eye on unscrupulous elements.

Another officer told Dawn that Khalid had caused a loss of millions of rupees to the national kitty by dodging state-run departments including the ministry of commerce, FBR and Fesco. He said the court had allowed 11-day custody of Khalid to the FBR.

Published in Dawn, May 28th, 2021