Islamabad: The Federal Board of Revenue (FBR) has decided to station Inland Revenue (IR) officials at sugar mills across the country during the crushing season to monitor production, sales, and stock levels. The decision, announced on Thursday, aims to strengthen oversight of the sugar industry and ensure compliance with tax regulations, reported Business Recorder.
The FBR has provided lists of sugar mills to relevant Large Taxpayer Offices (LTOs), assigning officials to oversee activities at each mill under Section 40B of the Sales Tax Act, of 1990. These officials will keep a close watch on the entire production process, including the initial stock of sugar and molasses, daily sugarcane deliveries, production volumes, and sugar dispatches. Additionally, the production and storage capacities of each mill will be assessed, and officials will ensure that track-and-trace stamps are properly affixed and invoices are logged into the STRACK portal in real-time.
The crushing season, which runs from November to March, has historically relied on industry-reported statistics for sugar production. However, the introduction of the Track and Trace system now provides the FBR with real-time data, enhancing transparency and accountability in the sector.
Prime Minister Shehbaz Sharif also issued stern orders to act upon the owners of sugar mills and dealers for hoarding, tax evasion, and price manipulations. The directive is related to the sending of joint teams from FBR the Federal Investigation Agency (FIA), and the Intelligence Bureau (IB), so that malpractices can be checked and pricing in the sugar sector should be fair. Surveillance cameras will be installed to oversee production and stockpiling with a focus on ensuring that GST payments are being made, as well as curbing artificial price hikes.
There has been an apparent Rs. 1.625 trillion in tax fraud which included dormant accounts and fictitious declarations of sugar supplies leading towards a potential loss of sales tax of Rs. 292.549 billion, according to recent investigations. Further inquiries confirmed that fraudulent tax inputs worth Rs. 380 million were blocked, and several suspects have been arrested in connection with the case.
The FBR’s Directorate General of Intelligence and Investigation Inland Revenue has intensified efforts to uncover other scams in the sugar industry, including fraudulent activities linked to misuse of personal login credentials and fake tax declarations. One case in Karachi involved the misuse of an elderly woman’s credentials for fraudulent sales tax filings, resulting in losses of Rs. 381.6 million.
As investigations continue into these cases, authorities are scrutinizing additional data to identify further irregularities in the sugar industry. The government’s latest measures aim to address tax evasion, improve transparency, and restore stability to the sugar sector ahead of the current crushing season.
