Following the short payment of around Rs 13 billion, the LTU Karachi has posted its officials at the premises of the said leading cigarette manufacturer in March under section 40B of the Sales Tax Act 1990 to monitor its production, sales of taxable goods and the stock position. Meanwhile, the tobacco squad established by the FBR has prepared a contravention report with a penalty of Rs 500 million against this leading cigarette manufacturer in Rawalpindi.
The sources further said that the modus operandi for duty and tax evasion was that the company marketed its products with wrong serial numbers to avoid legal proceedings over tax evasion. They said that this tactic was also confirmed through stock inventory. Answer a question, sources said that the department was expecting to generate Rs 4 billion to Rs 5 bn additional revenue after finalizing the findings under section 40B of the Sales Tax Act 1990. Moreover, they said that LTU, Karachi, had recently issued an order against this leading cigarette manufacturers, raising tax demand amounting to Rs 1.7 billion; adding that there was no difference of opinion in FBR to initiate criminal proceedings against the said cigarette manufacturer in customs court and the department was presently following all due procedure before lodging FIR in this case.