Sources informed that a major enforcement action against AJK's non-tax paid cigarettes has been carried out by three field formations of the FBR under the supervision of IR Enforcement Network. The Network has intensified its efforts against the seizures of AJK cigarettes within the territorial jurisdiction of Pakistan.
The operation was jointly carried out by Regional Tax Office (RTO) tobacco squad Sialkot, tobacco squad RTO Rawalpindi and Directorate General of Intelligence and Investigation Inland Revenue Lahore. Three formations shared information that five non-tax paid trucks coming from AJK.
A joint strategy was chalked out and operation was conducted. All three formations jointly seized two trucks having (5.60 million sticks) 560 Packrites of non-tax paid cigarettes. These cigarettes belong to AJK where duty was not paid and planned to be sold at cheap prices within the territory of Pakistan.
In another operation, RTO Sahiwal tobacco squad has seized 431 Packrites (4.31 million sticks) of local non-tax paid cigarettes. The head of tobacco squad and incharge Deputy Commissioner Zulfiquar Ali raided two godowns after fulfillment of all legal formalities.
Muhammad Tanvir Akhtar, Central Co-coordinator of IR Network on illicit tobacco/cigarette trade has highly appreciated the efforts of all field formations for taking major actions against the non-tax paid cigarettes.
Senior officials explained that the Pakistani tax authorities have legal power to check/inspect and monitor the trade of cigarettes within their jurisdiction and if any movement is against the law, they can seize the non-duty paid cigarettes. Pakistani tax authorities are effectively checking the cigarettes manufactured in AJK and brought into territorial jurisdiction of Pakistan.
Inland Revenue Enforcement Network opined that the cigarette manufactures of the AJK are involved in dumping of low quality and non-duty paid cigarettes in Pakistan. The cigarettes manufactured in the AJK are sold at a very cheap price as compared to duty paid cigarettes of compliant manufacturers in Pakistan.
According to the sources, the AJK-based cigarette manufacturers are wilfully involved in illicit cigarette trade in Pakistan by dumping low priced/non-duty paid cigarette. The Inland Revenue Enforcement Network has done key intelligence gathering to confirm the prices of AJK cigarettes sold in local market of Pakistan.
It was also learnt that all the seized brands of the AJ&K origin were being sold at a retail price which was ever lower than the amount of duty/taxes payable thereon. The minimum price itself constituted the evidence that no duty/taxes have been paid on such supplies; and, therefore, for Pakistan tax authorities all AJK tax authorities and AJK council have been repeatedly requested for positive intervention but till date no meaningful actions has been initiated in this regard.
The Inland Revenue Enforcement Network has taken up the matter with the AJK authorities to jointly take action against non-duty paid cigarettes manufactured in the AJK. However, there was no cooperation from the AJK side, sources said. In past cases, the investigation made by the Inland Revenue Enforcement Network revealed that the invoices contained in the trucks revealed that the ghost buyers and non-existent buyers were shown to evade the authorities.
The destination declared on the invoice is different from the actual destination meant for the AJK cigarettes in Pakistan. Practically, a focal person of manufacturing unit remained present in Pakistan who is actual recipient of the AJK cigarettes. The buyers and sellers of these non-duty paid cigarettes are the same. The telephone number of such recipient is available with the driver of the truck carrying NDP cigarette for making contact in Pakistan.
Post-interception probe revealed that ground check reports proved that in all the three cases, the invoiced buyers had fake particulars as declared business premises had no existence on the ground or was being used for some other purposes. Thus practically sales invoices issued by the AJK cigarette manufacture were only meant to defraud Pakistan tax authorities, the sources added.