LAHORE - The Haseeb Waqas Sugar Mills and Abdullah Sugar Mills paid Rs140 million out of Rs267 million to the Federal Board of Revenue under the head of Federal Excise Duty on sale of sugar while rest of the amount was submitted through post-dated cheques. The case is in appeal before Lahore High Court, which has served notices to the FBR. Moreover, the court has not decided yet that the sugar mills committed any tax evasion, the management claimed.
The management of Haseeb Waqas group pleaded that both the mills were facing huge loss because the cane (raw material) price was announced by the government, fixing it at high level against the open market rate to support the growers. On the other hand, the rate of sugar (final product) had been left to the mercy of market forces.
“The Abdullah sugar mills paid Rs83 million out of Rs154 million’s FED while Haseeb Waqas sugar mills paid Rs53 million out of Rs113 million’s FED for the months of December 2014 and January 2015 while rest of the amount was submitted in post-dated cheques, because the mills sold their stock at loss of more than Rs10 per kg,” stated Haseeb Waqas Group Director Finance Ansar Ahmed.
While talking to The Nation, Ansar Ahmed claimed that “we also requested the FBR to give us time for the remaining payment in installments but the tax officials rejected our request and got FIRs registered against us.” All sugar mills located in central Punjab are facing loss of billions of rupees due to high cane support price versus low prices in Sindh. The mills of South Punjab can manage to continue operations due to high sucrose content of cane in their area but low sugar sucrose content is forcing the millers to shut their units in central Punjab. Several mills of this area either have been sealed by the FBR due to non-filing of returns or the owners themselves have closed their mills owing to high losses.”
Other mills did not file tax returns but we filed returns and government punished us for this crime of filling tax returns, he said. He also criticized media for running one-sided story. This is unethical to publish the one-sided picture, as the media should also have contacted us to give our point of view. The matter is subjudice as case is pending in court but we have been declared as tax evaders by the FBR and media one-sided, he said.
He pleaded that that FBR, under the rules, facilitated cement as well as textile sectors in the past when these were in loss and their payments were allowed in installments.
FBR officials, on the other hand, claimed that Hseeb Waqas sugar mills evaded Rs94.64 million FED while Abdullah Sugar Mills evaded Rs59.49 million by not declaring actual sugar stocks. The total FED evasion reached Rs154.142 million from Abdullah Sugar Mills alone. In Haseeb Waqas Sugar Mill, same modus operandi was adopted by Mian Waqas Riaz, in which Rs113.62 million loss was caused to national exchequer.
“We constantly asked the management of two mills to submit their tax but they continued to use delaying tactics. We got registered FIRs against them and they (sugar mills) moved to the Lahore High Court where their appeal was rejected and they went for intra-court appeal which is pending at present,” said an official of the FBR who is associated with this case but did not want his name be mentioned.
FBR officials said that almost all sugar mills have paid their FED because they charge it from the customers on behalf of the government. It is not concerned with the loss or profit on sale of sugar stock, they added.
For instance, JDW Sugar Mills paid Rs50 million FED in January on sale of their sugar stock, Indus sugar mills paid Rs50 million, Ramazan sugar mills paid Rs44 million, Shamim Sugar mills paid Rs25 million, Tandlianwala paid Rs39 million and Joharabad sugar mills paid Rs20 million in this period. No mills demand any relaxation due to loss on the plea of low sugar prices in open market, officials argued.
FBR sources said that “we got issued bail-able arrest warrants for the millers from Customs court but could not arrest them, as the absconding directors of the mills reside in the area near to Sharif family’s residences which is high security zone and not accessible even by the FBR. The next hearing in Customs court has been fixed on 21st and mills directors will be granted bails, sources revealed.
Sugar industry stakeholders stated that government attitude towards the industry is not fair. The government’s major focus is just revenue collection instead of promoting industry which generates hundreds of thousands of jobs directly and indirectly. A single mill, on one side, pay around Rs 1 billion taxes and on the other side provide jobs to thousands of workers, bides engaging thousands of growers. This policy of the government will cause total closure of the industry and overall loss of economy. Several sugar mills are being closed or sealed in central Punjab including Brother sugar mills, Hussain sugar mills, Pattoki sugar mills and Shakar Gunj sugar mills and government should take notice of it only in national interest, they added.