ISLAMABAD   -  Federal Board of Revenue on Thursday informed the Public Accounts Committee that Chahat Foods Industries has got tax concessions of about Rs540 million against a fictitious industry on papers, which was never operational on ground.  

The committee met with MNA Rana Tanveer Hussain in the chair at Parliament House. Chairman FBR submitted a preliminary inquiry report into the scam, which was initiated on the directions of PAC.  

According to FBR’s report, a team of the Directorate General Audit, In Land Revenue and Customs Lahore was formed to probe the factual position and operations of Chahat Foods Industries and to check their tax concessions under different heads.  

The team visited Chahat Foods Industries located at Gaggo Mandi, district Vehari and its head office at Faisal Town Lahore to ascertain whether there was the unit in running position and manufacturing activities were being carried out to establish the company a status of importer cum manufacturer.  

However, during the visit the team came to know that no such industry was operational on the location and the premises were giving a desert look as installed machinery was rusty and un-operational.  

The whole premises were managed only by three men including two guards and a supervisor. The factory has only one electricity connection while there was no gas connection installed. 

The report further said that Chahat Foods created refundable amount of Rs178221282 in its income tax returns of 2020 in fraudulent manner while it also caused a loss of Rs365183528 to public exchequer till February, 2021 under sales tax by using its fake industrial unit.  

“On the bases of physical verification and available record it is established fact that Chahat Foods does not carry out any manufacturing activity,” the FBR’s report maintained, suggesting that a formal probe should be carried out to ascertain the original losses to public exchequer and to fix the responsibility.   

Rana Tanveer Hussain said the government has announced concession to the manufacturing industry but in this case a man gets tax concession of millions without having such industrial unit.  

MNA Syed Naveed Qamar said it is not a fraud alone but it is also a criminal offence and needs to be investigated properly. MNA Noor Alam Khan and some others asked Chairman FBR to give the name of the owners but he refused and said he cannot give the names at the moment.  

The Chairman PAC asked FBR to conclude probe in the matter in one week but Chairman FBR sought one month time as according to him a court proceeding is also underway in this regard.  

The PAC was of the view that there are some elements within FBR that are involved in this fraud therefore the case was referred to the National Accountability Bureau (NAB) for investigation.