PRA is probing a case of tax evasion against a Lahore-based engineering and catering services company that possibly provided services worth of more than Rs 50mn but paid tax for services of Rs 0.3 mn only evading at least Rs. 6.8mn of taxes.
According to a series of documents, the copy of them is available with Outlook Pakistan, M/s United Engineering & Services Lahore that offered the services to catering companies and advertisers agencies for high profile official events and ceremonies of the government, issued sales invoices worth of Rs. 59mn to its clients from 2013 to 2016 but submitted invoices to the PRA for Rs 0.3 mn of services and paid tax of Rs 62,452 only.
M/s United Engineering & Services provided its services to the events and gatherings that were meant to be attended by Prime Minister Nawaz Sharif, CM Shehbaz Sharif and other officials.
As part of the tax evasion tactics, the company also kept its money in almost five different bank accounts, one of amongst them was the name of a low paid worker Naeem Masih. According to documents issued by PRA bank account of Naeem Masih was credited with a total amount of more than Rs. 31mn from 2013-2016.
Here are the details of company’s bank accounts.
The company made payments of more than Rs. 49mn to his unregistered suppliers for taxable products and services but didn’t pay any withholding tax too.
In its show-cause notice to the company, PRA said, “since the service providers (suppliers) were providing taxable services without getting registered with the Authority, the registered person was required to withhold and deposit the amount of sales tax before making the payment in terms of section 10, 14 and 18 of the Punjab Sales Tax and Services Act , 2012 read with Punjab Sales Tax on Services (Withholding) Rules, 2015.”
The notice further stated, “The registered person has failed to discharge its statutory obligations thus is liable to pay an amount of Rs. 6.8mn regarding the section 19 of the Act read with Punjab Sales Tax on Services (Withholding) Rules.”
The letter said, “The office os conducting an investigation in the case of M/S United Engineering & Services Lahore. It was accordingly requested to provide the month wise detail of services received from them along with detail and mode of payment during the period July 2013 to December 2016, however, the same is not received so far.