HP Tax evasion. Company share the information


HP-LogoThe regional office of the Hewlett-Packard (HP) in Singapore finally shared the information required by the Federal Board of Revenue (FBR), senior officials told The Newspaper on Monday. The News reported.

“After the arrest of two HP officials from Karachi, the HP’s regional office contacted the FBR and shared the required information, which was earlier not provided despite that the FBR sought the information through four letters,” the officials said.

The FBR had asked the company to share information regarding the alleged tax evasion scam.

Last week, the FBR’s Intelligence and Investigation team of Inland Revenue had nabbed two HP’s officials on information from the third party sources that the multinational company was involved in an alleged tax scam.

“We have unearthed a complete chain of an alleged tax fraud from retailer to distributor and then to manufacturer – spanning from Islamabad to Karachi and to US,” commented an official at the FBR. He said that the tax authority had been working on this case for the last one year. He further said that the tax officials had made an arrest of Asad Haider of Horizontal Business from the Blue Area, Islamabad last year.

This led to a clue against a major information technology company Advance Business System (ABS), which is a distributor of HP, he added. “We recovered millions of rupees from the Horizontal Business and also proceeded against an FBR official who allegedly tried to pocketing money through corrupt practices,” said the official.

The intelligence and investigation wing received credible information that ABS was allegedly involved in the tax evasion and frauds as defined under the Section 2 (37) of the Sales Tax Act, 1990.

The ABS approached the Sindh High Court and obtained a stay order.

The investigation, said the tax official, found that ABS was issuing non general sales tax invoices to understate its tax liabilities, maintaining benami bank accounts to deceive the tax authorities, depositing in them money earned through this illegal and unlawful transaction and selling computer hardware and peripheral devices imported through carriers to evade taxes.

A search, he added, was also conducted at the Islamabad office of ABS to obtain material evidence after obtaining an approval from the magistrate and in accordance with the Section 40 of the Sales Tax Act, 1990 and relevant provisions of the Code of Criminal Procedures, 1908.

According to the FIR, the data available in a laptop of a company showed that the sales tax was evaded on HP products amounting Rs29.062 million between 4 December, 2012 and 1 November, 2013.

The ABS is a distributor of several other companies, including Dell, Acer, Touchme, etc.

The FBR also established that the ABS office in Islamabad was maintaining benami accounts on the name of its employees: one on the name of GM Traders (account number-02011841920, Soneri Bank, Blue Area, Islamabad) and Parwaiz (acct no-1323-20309-714-116897, Summit Bank Limited).

These undeclared benami accounts were allegedly maintained to evade taxes and for illegal transactions out of books, according to the FBR’s officials.

Moreover, the tax machinery found ABS involved in the sale of products imported illegally and which were not appeared in domestic purchases.

The FBR obtained data from Dell regarding purchases of ABS and imports declared by it. The data showed significant difference between the total imports declared and actual imports from Dell for 2012-13, said the officials.

“This difference is equal to Rs1.2 billion on which sales tax was allegedly evaded.”

The stock and sales statement of the Islamabad office of ABS shows that a large number of products are sold, which are imported illegally to allegedly evade tax.

The ABS version on the story is not available.

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