ISLAMABAD, Jan 9: The Central Board of Revenue (CBR) has unearthed a sales tax refund scam amounting to over Rs370 million and initiated an inquiry against senior customs officials.

A senior CBR official told Dawn that this was one of a series of sales tax refund frauds detected by tax officials during the last couple of years which deprived the national kitty of billions of rupees.

The scam was about the payment of undue sales tax refunds to leading payphone companies.

Five officers of the customs group were suspended following an initial report of the scam, including two former sales tax collectors -- Mohammad Nazim Saleem and Nadir Khan Hoti of Lahore and Rawalpindi, respectively. At the time of suspension they were posted as chief customs wing, CBR, and collector of sales tax, Peshawar, respectively.

Besides this, two additional collectors and one deputy collector have also been suspended in the same scam. They are: additional collectors Dr Naeem Aijaz Qureshi and Asim Majeed Khan and deputy collector Mohammad Saeed Watto. Notification for one of the deputy collectors was yet to be issued, added the official.

Of the total refund scam of Rs370 million, the Lahore collectorate of sales tax issued a refund of Rs230 million and the Rawalpindi collectorate Rs140 million to the payphone companies in 2005.

Interestingly, the customs intelligence and investigation directorate has already conducted a detailed investigation into the Rawalpindi collectorate refund scam but no action has been taken against the person actually sanctioned and released the refund to a payphone company. Even no show-cause notice has been served on the companies for the recovery of the amount.

In another case of refund embezzlement, the CBR has made Mohammad Raza Baqir, collector of customs, officer on special duty (OSD). He is currently on deputation for a staff college course necessary for upgradation in the next scale.

CBR Chairman M. Abdullah Yousuf told Dawn that his division would shortly issue a detailed charge sheet against the suspended officials. He admitted that the officials were involved in irregularities of sales tax refunds.

The total number of refunds scam involved three to four cases, he said, adding that all of them related to the telephone industry. The CBR chairman said that one of the custom collectors was made OSD following his involvement in a refund and other irregularities.