FBR ordered to recover Rs 5.5bn from 12 steel melters of Lahore

ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to recover approximately Rs 5.5 billion from 12 steel melters in Lahore who have allegedly submitted “unverifiable certificates” resulting in huge losses to the national exchequer.

The FTO had conducted inspections of 12 steel melters in Lahore and found that they had allegedly deposited “unverifiable certificates” on account of GST payments that resulted in causing a huge loss.

The FBR had conducted internal inquiries and also found alleged tax fraud but had not taken any action against anyone. The FTO gave a verdict and instructed the FBR to recover the amount from the steel melters.

The FBR had linked the payment of GST with electricity bills in 2007, and in 2014, an amendment was inserted to allow commissioners to issue exclusion certificates for the payment of GST, which they were supposed to share with the relevant power distribution companies.

The FTO found glaring violations on account of misuse of this scheme, and it was found that thousands of exclusion certificates were issued, out of which some were genuine, some semi-genuine and some of them were fraudulent.

The FTO’s investigation found that there were glaring violations, but the FBR had not taken any action.

According to the FTO’s findings, an amount of approximately Rs. 5.5 billion is suspected to be evaded in such cases at CTO, Lahore.