FINDING/RECOMMENDATIONS:

MUSHTAQ AHMAD SUKHERA, FEDERAL TAX OMBUDSMAN:---This is an own motion investigation of systemic maladministration through exercise of jurisdiction, conferred under Section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), based on a news item published in the Daily Dawn dated 4th March 2018, regarding ghost entities registered as manufacturers with fictitious addresses, being setup only for tax evasion by claiming benefit of SRO 1125(I)/2011 dated 31.12.2011. These fraudulent entities not only evaded sales tax in respect of imported fabrics but were involved in issuance of fake invoices for claiming sales tax refund as the FBR had failed to build robust system whereby such fake registration could had been avoided. Once these fraudsters are registered as 'manufacturers' by the Local Registration Office of the RTO concerned, the benefit of SRO 1125(I)/2011 dated 31.12.2011 is extended by the Customs Department at the time of import on the basis of profile available on FB...