Shell Pakistan suspended by FBR for Tax Evasion. The registration of Shell Pakistan is suspended by the Federal Board of Revenue (FBR) due to intentionally committing tax fraud to dodge tax.
The order was revealed on Thursday by FBR as Shell committed tax evasion of around Rs 3 billion. After the cancellation of its registration, Shell Pakistan isn’t allowed to perform any business in the country.
On the other side, it’s shocking that according to FBR, Shell Pakistan was successfully committing tax fraud for the past three years.
Asma Aftab, Additional Director at FBR declared that Shell had purposely covered the actual amount of sale of its products and paid less tax. During the inspection of sales tax returns available at E-Portal of FBR (from December 2016 to Feb 2018) it was out in the open that Shell Pakistan had concealed the stock of lubricating oil in Annexure J of Sales Tax and Federal Excise Returns.
Shell Pakistan made Suppressed Sales of Rs 7.684 billion during the above-mentioned time period. Principal sales tax on this value is Rs.1.46 billion. Moreover, FBR also forced a default surcharge of Rs. 142.503 million and 5% fine of amount Rs. 73.003 million
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The order of registration suspension was issued by the Large Taxpayer Unit after finding out that the ‘oil company has concealed the supply of lubricating oil in Returns filed for the duration of Dec-2016 to Feb-2018, which comes to the meaning of tax fraud’.
The notification stated:
“It is noteworthy that the Registered Person continued the fraudulent practice till last Return filed for the month of March 2018, in order to safeguard the Government Revenue, this office immediately order for suspension of Sales Tax Registration of M/s. Shell Pakistan Limited under Section 21(2) of Sales Tax Act, 1990 read with Rule 12 (a) (i) of the Sales Tax Rules 2006 read with SRO SSS (1)/2006 dated 05-06-2006.”
On the other hand, Shell Pakistan didn’t comment on the issue as management has declined to make a public statement on this development.
Shell Pakistan’s Response
“Shell Pakistan Limited (SPL) had received a notification from the FBR requiring the company to explain a tax discrepancy, SPL was allowed by the FBR to respond by 30 April 2018. The company had earlier clarified that the relevant amount of tax had been paid in full therefore there was no shortfall in the payment of tax. However, FBR proceeded with the suspension of SPL’s GST license before the stipulated time given to the company to respond. The suspension of registration was hence not justified, SPL therefore took the matter to the Honorable High Court of Sindh which has suspended the directive of FBR and ordered that it be reinstated with immediate effect. SPL complies with all statutory requirements of the Country, and strives to conduct its business in accordance with the applicable laws of Pakistan. SPL will continue to work closely with the tax authorities to resolve this issue.”
