ISLAMABAD  -  A leading cement company has been found involved in a multi-billion rupees tax fraud through a ghost company registered in the name of a Wapda’s deceased pensioner. This multi-city operation, with a web of fake transactions, has come to light from the Directorate of Internal Audit, IR, Karachi. DG now has filed a complaint to Customs & Taxation Court, Karachi, on the scam that resulted in causing a loss of around Rs 11.3 billion to the exchequer. According to the document, the ghost company that was a primary accused in the case, which investigators claimed was at the centre of an elaborate network of fake invoices and fraudulent tax claims, was found operating from non-existent addresses.

Investigation showed that, on going to the declared business locations in Karachi, other businesses were found operating on those places; occupants at those places maintained that the said ghost company had never existed at those addresses. Prima facie, no signs of any legitimate business operation were observed concerning the accused company. The accused company did not have basic elements of an office staff, godowns, or vehicles that would correspond to the volume of transactions declared. Once again, astonishingly, one such ghost company involved in this fraud was registered in the name of a retired Wapda pensioner, who drew less than Rs 10,000 per month and who died on January 7, 2019.

The shockingly surprising thing emerged that long after his death, the company continued doing its tax returns and transacted several billion rupees. Reports said the deceased man’s company reflected a bogus turnover of Rs 66.5 billion, which is impossible and unthinkable for a company registered to a deceased pensioner. It further said the investigation has unraveled a complex chain of companies passing on fake invoices and fraudulent input tax claims. It said this chain involved several firms across different tax jurisdictions. It claimed the leading cement company, falling within the jurisdiction of LTO-Karachi, emerged as the major beneficiary of this fraud chain that on the face value reflected flying/fictitious purchases to the tune of Rs 1.6 billion, yielding a shock of Rs 316 million in the shape of sales tax to the national exchequer.