The Post Clearance Audit (PCA) South has uncovered a massive money laundering case involving nine fraudulent iron and steel importers. The scandal is estimated to be worth a staggering Rs9.7 billion over the past three fiscal years.

According to the classified document obtained by Business Recorder, the importers exploited the “manufacturing status” loophole to evade Rs315 million in duty taxes. They falsely claimed exemptions and reduced rates of duty/taxes that were only meant for legitimate manufacturing enterprises.

However, upon investigation, the PCA teams found that these companies were physically non-existent, with untraceable addresses. Further scrutiny of the FBR database revealed that these importers had transferred Rs9.72 billion abroad while lacking any real manufacturing facilities or business premises.

The modus operandi indicated a well-orchestrated plot to illegally siphon funds out of the country. The importers had very poor financial worth as per their income tax declarations, yet they managed to finance massive imports worth billions of rupees.

Read more

Govt decided to lease Pakistan Steel mill

Iranian companies interested in leasing Pakistan Steel Mills

ECC approves Rs3850m due to employees of Pakistan Steel Mills

Strikingly, three of the nine importers did not even file income tax returns, further highlighting the suspicious nature of their activities.

The PCA South has initiated a comprehensive audit of the iron and steel import sector following reports of widespread misuse.

This latest case underscores the need for stricter controls and vigilance to curb the menace of money laundering in Pakistan’s trade and commerce landscape.