ISLAMABAD: The Directorate General of Intelligence and Investigation of the Federal Board of Revenue (FBR) has unearthed duty and tax evasion of Rs716.27 million in the clearance of steel bars at Hyderabad Collectorate.

Karachi’s Customs Intelligence Regional Office has lodged a First Information Report (FIR) against the culprits. The steel, initially cleared at the Hyderabad Collectorate, was later found to be used in a construction project in Karachi. The FIR was submitted before the special judge (customs, taxation and anti-smuggling) in Karachi.

As of June 30, 2023, the calculated surcharge amou­nted to a staggering Rs665.31m, with the value of the cleared goods reaching an impressive Rs2.178 billion.

The report shows that, based on initial inquiries, the accused individuals committed the predicate offence by exploiting another company. This company was implicated in the illicit removal of 14,392 tonnes of iron and steel waste, scrap and silico manganese from a private bonded warehouse.

Over Rs3.5bn money laundering exposed

A thorough stock-taking reveals that only 3,761 tonnes, along with an estimated remaining stock of 700 to 1,000 tonnes, were found. This is in stark contrast to the balanced quantity of 18,854 metric tonnes recorded on March 20, 2023. The discrepancy

indicates that the individuals implicated had illicitly removed 14,392 metric tonnes of in-bonded goods,

valued at Rs2.17bn, bypassing the requisite duty and tax payments.

The report implicates the accused individuals in a money laundering offence. They allegedly used the “proceeds of crime” to fund the development and progression of a Karachi-based project, HSJ ICON. These funds, originating from HSJ Metals (Pvt) Ltd, should have been rightfully paid into the government exchequer, the report said.

The report further elaborates that individuals who are managing two interconnected entities are under scrutiny. One entity is implicated in the generation of crime proceeds, while the other is involved in the placement and integration of such proceeds.

This was done through an unregistered entity that does not file returns and acts as an intermediary.

Given these circumstances, the case comes under the purview of the Anti-Money Laundering Act 2010, according to the report.

Customs Intelligence has said that the entire operation led to money laundering amounting to Rs3.55bn, including evaded duty/taxes, surcharge and goods value. Additional inquiries are being conducted to determine the involvement of the directors, partners, and owners of the two organisations identified so far.

Published in Dawn, October 31st, 2023