Sources told Business Recorder here on Tuesday that the agency has issued the Red Alert against the unit falling within the jurisdiction of RTO Karachi. The refund claim was processed in haste by the RTO officers but timely stopped by the agency to once again save valuable revenue. The increasing number of "Red Alters" within the jurisdiction of RTO Karachi speaks itself about number of claims checked by the directorate of intelligence IR.
The directorate is of definite view that the claim of aggregated refund of Rs 6236930/- for the tax periods July and August 2012 is based on fake/flying invoices and it is crystal clear that the major portion of input tax of subject unit is fake, which shows that the whole activity is an engineered affair aimed at issuing illegal sales tax refund.
In the presence of sizable number of auditors and senior auditors why concerned Zone of the RTO Karachi has failed to identify the aforesaid discrepancies which could be traced through a cursory desk audit, Directorate questioned Chief Commissioner RTO Karachi. The record shows that the subject unit has been purchasing variety of goods/raw material and then making zero-rated supplies to various buyers, directorate of intelligence IR said.
The data shows that the subject unit has been purchasing variety of goods/raw materials and then making zero rated supplies to various buyers. The majority of the goods/raw material are not zero rated, therefore, creation of refunds on the basis of zero rated supplies of non zero rated goods/raw material is an illegal act which needs careful examination and, apparently the refund processing officers/staff have not done it as evident from the hasty sanction of refunds.
According to the Red Alert, the RTO may like to develop its internal control mechanism so as to identify all such cases within its respective jurisdiction. The RTO must initiate criminal proceeding against the subject unit as well as its departmental God fathers. Directorate General I&I-IR has conducted discreet intelligence check about the genuineness of the refund claim of the said unit and it is found that the subject unit has been claiming dubious/illegal input from various suppliers. An aggregated amount of refund of Rs 6, 236,930/- for the tax periods July and August 2012 has been claimed by the subject unit which is sanctioned accordingly on December 4, 2012.