Multibillion-rupee tax evasion, money laundering unearthed

The Directorate of Customs Post-Clearance Audit (PCA) has uncovered a multibillion-rupee tax evasion and money laundering scam in the iron and steel import sector.

Director of Customs Post Clearance Audit Shiraz Ahmed told The Express Tribune that they had received intelligence about potential frauds related to iron and steel imports. This led to a comprehensive post-clearance audit, which identified misuse of manufacturing status by certain importers. The audit uncovered that nine importers had exploited this status to evade duties and taxes amounting to Rs315million.

Further investigation into the Federal Board of Revenue (FBR) database revealed that these companies had transferred a whopping Rs9.72 billion abroad. Moreover, scrutiny of sales tax and income tax data identified that three out of the nine importers had transferred Rs2.50 billion abroad without filing tax returns.

Shiraz further stated that the PCA issued notices to the nine importers through audit couriers. However, these notices were returned marked "unidentified address," suggesting the addresses provided were fictitious. This discrepancy prompted the PCA team to physically verify the addresses, which were confirmed to be false.

The nine importers involved in these irregularities have been identified as M/s Metal Toss Private Limited, M/s Unity Recycling Industry, M/s The Material House, M/s Fornix Icon, M/s Metropolitan Steel, M/s Hasnain International, M/s Khaleeb Trading, M/s HB & Sons, and M/s Al Hadid Steel.