FBR Cracks Down on Cement Sector for Tax Fraud Allegations

The Federal Board of Revenue (FBR) has launched an in-depth investigation into the cement industry after imposing a hefty fine on a leading cement company.

This action follows allegations that the company falsely claimed input tax credits using fraudulent coal purchase invoices.

The investigation exposed a network of blacklisted companies involved in deceptive practices to avoid paying sales tax.

In response, the FBR has expanded its audits across the industry, with the Large Taxpayers Office (LTO) in Karachi also examining another major cement company.

The LTO’s review found that this company had wrongly claimed input tax of Rs 14,686,443 using invoices from a blacklisted firm in September 2022.

The Internal Audit Inland Revenue (IAIR) flagged these questionable transactions, revealing fake purchases totaling Rs 1.6 billion, which resulted in a Rs 316 million loss in sales tax for the national exchequer.