The owners of a leading brand of the shoe industry in Pakistan are allegedly involved in massive sales tax evasion.
Directorate General of Intelligence and Investigation Inland Revenue has arrested a customs employee, who is allegedly a member of a group operating fake and dummy units to evade sales tax of Rs. 1.2 billion.
One of the main beneficiaries of fake and flying invoices issued by M/s Fast Traders is allegedly a popular shoe retail brand. M/s Fast Traders has issued fake and flying invoices without actual delivery of goods to these two concerns at a value of Rs. 57.8 million involving sales tax of Rs. 9.8 million and a value of Rs. 1.19 billion involving sales tax of Rs. 208 million, respectively.
Against the sales tax inclusive value of Rs. 1.47 billion, the said beneficiary has allegedly made payments in the Bank Account of M/s Fast Traders only to the tune of Rs. 651.5 million (i.e., compliance of section 73 is made only to the extent of 41.91 percent of total value that’s too only for hoodwinking the department).
It was found that every time the amount was remitted from the said Beneficiaries’ bank account to the bank account of M/s Fast Traders the said amount was allegedly withdrawn in cash on the same day by Malik Faisal Sajjad. In this way, the total cash withdrawal by Malik Faisal Sajjad from the single bank account is Rs. 651 million.
The investigation from the said accused had revealed that the fraudsters registered a dummy unit (Fast Traders) in the name of Muhammad Imran and a bank account was also opened in Lahore. The retrieval of bank account details revealed that Malik Faisal Sajjad was allegedly involved in the commission of the said tax fraud. They said Malik Faisal Sajjad was in hiding and despite hectic efforts, he was not traceable.
During the pursuit to locate him, it was found that he is an employee of Pakistan Customs in the designation of Lower Divisional Clerk (LDC) and is presently posted in the Directorate of Input Output Coefficient (IOCO), Lahore.
It was further found that the accused has not attended office since November 1, 2023, and no one in his office was aware of the reason for his absence.
He is allegedly a member of the group operating fake and dummy units with intricate layering and hiding mechanisms. The accused is revealing only very minimal facts and is accepting only those facts that are confronted to him on the basis of audio/ video or documentary evidence during the hearing.
The accused has deposited a big chunk of approximately Rs. 115 million in his personal bank account. The alleged individual has also disbursed amounts from his personal bank accounts to his accomplices in the tax fraud. He only admitted this fact when he was confronted with the documented evidence in the form of bank records otherwise the accused was reluctant to reveal the names of any of his accomplices.
It is also found that the alleged individual was also maintaining many other bank accounts in his name and in the name of his wife and brother. Data related to said accounts is also requisitioned.
The directorate has requested the court to grant physical remand of the accused for a further period of 14 days.