Lucky Cement Entangled in Fake Invoice Case, Seeks Clarity from FBR

Federal Board of Revenue (FBR) has cracked down on a supplier allegedly issuing fake invoices to Lucky Cement, a prominent Pakistani cement manufacturer. This incident highlights the ongoing challenges of curbing tax evasion through fraudulent invoicing practices.

FBR’s Case Against Lucky Cement Supplier:

  • The FBR’s Directorate of Intelligence and Investigation (Inland Revenue) uncovered a case involving a Lucky Cement supplier, M/s Al-Abbas Traders, accused of issuing fake invoices worth millions of rupees.
  • The FBR filed a case against M/s Al-Abbas Traders with the Special Judge (Customs & Taxation).

Lucky Cement’s Response:

  • Lucky Cement clarified that M/s Al-Abbas Traders issued fake invoices to ZA Choice, a coal supplier for Lucky Cement.
  • Lucky Cement maintains it follows proper sales tax procedures and only purchases coal from FBR-registered and active vendors. Additionally, they claim to obtain copies of suppliers’ sales tax returns to verify input tax claims.
  • The company criticizes the FBR’s systems for failing to identify non-compliant sellers, leading to “harassment” of compliant taxpayers like Lucky Cement.
  • Lucky Cement is considering legal action against FBR’s Intelligence and Investigation officials for allegedly recovering “undue amounts.”

Unresolved Issues:

  • The extent of Lucky Cement’s involvement, if any, remains unclear.
  • The company disputes the FBR’s claims and seeks transparency regarding the process of identifying non-compliant vendors.
  • The effectiveness of the FBR’s systems in detecting fake invoices requires further scrutiny.

Looking Ahead:

This case underscores the complexities of tackling tax evasion in Pakistan. While the FBR’s efforts to curb fake invoicing are commendable, concerns regarding fair treatment of compliant taxpayers need to be addressed. A more robust system for identifying non-compliant entities and smoother communication between tax authorities and businesses could be crucial in fostering a more efficient tax collection environment.

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