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FBR special audit team creates demand of Rs469b tax against 81 sugar mills

FBR special audit team creates demand of Rs469b tax against 81 sugar mills

LAHORE: Special audit team of the Federal Board of Revenue (FBR) has created a demand of estimated Rs469 billion tax against 81 sugar mills, some of them directly owned or co-owned by politicians.

The FBR started a probe against the country’s 89 sugar mills’ alleged irregularities pointed out by the Sugar Inquiry Commission (SIC) in 2020. “We have imposed a tax of Rs404 billion on 61 sugar mills till 28th February this year. Our audit teams have created an estimated tax of Rs65 billion against 20 sugar units whose cases are still pending in different courts,” a senior official told The News on Wednesday.

The official said the FBR special teams, in months long exercise of the forensic audit of sugar mills, issued notices of Rs404.2 billion to 61 sugar mills in the past two months. In light of the SIC’s recommendations, the FBR regional tax offices kicked off a composite audit exercise of income tax and sales tax of sugar mills last year.

The FBR audit team, after evaluating record of JDW Sugar Mills, Ltd. and five other sugar mills from 2015 to 2019, owned by PTI leader Jahangir Khan Tareen, has created some Rs7 billion tax demand, a senior FBR official revealed on condition of anonymity. “Tax demand notices have not been served on these mills yet. This amount may go up even after the audit team’s proceeding is concluded,” said the official.

The FBR also assessed record of RYK Group Of Sugar Mills, owned by family of Makhdoom Khusro Bakhtiar, Makhdoom Hashim Jawan Bakht and Makhdoom Omar Shehryar, from 2015 to 2019, where officials created a tax demand of Rs9 billion against the group, said another FBR official who is associated with the audit team. Notices of demand have not been issued yet as the matter is sub-judice.

The FBR audit team also generated a demand of Rs8 billion tax against Chaudhry Sugar Mills and Ramazan Sugar Mills, owned by Sharif family, said the official. In May 2020, the SIC submitted its final report to the prime minister recommending, “The FBR may conduct a comprehensive tax audit of all sugar mills for the last five years.”

The FBR team generated a tax demand of Rs25 billion against Fatima Sugar Mills Ltd, Rs18 billion against Ashraf Sugar Mills Ltd, Rs6 billion against Abdullah Sugar Mills Ltd, Rs4 billion against Huda Sugar Mills Ltd, Rs7 billion against Kashmir Sugar Mills Ltd, Rs3 billion against Rasool Nawaz Sugar Mills, Rs4 billion against Haseeb Waqas Sugar Mills, Rs5 billion against Ittefaq Sugar Mills, Rs7 billion against Pattoki Sugar Mills, Rs2 billion against Thal Industries Ltd, Rs4 billion against Noon Sugar Mills, Rs3.6 billion against Al-Moiz Sugar Mills, Rs1.4 billion against Indus Sugar Mills, Rs2 billion against Shakargarh Sugar Mills, Rs470 million against SGM Sugar Mills Ltd, Rs147 million against Husein Sugar Mills, Rs29 million against TMK Sugar Mills Pvt Ltd, and a tax of Rs3 million was generated against Vanguard Sugar Mills, according to official documents.