Islamabad: The Federal Board of Revenue (FBR) on Tuesday sealed a clandestine cigarette manufacturing unit in Chakwal and seized raw tobacco, cigarettes manufacturing material and unstamped cigarettes and machinery, with the operation’s overall economic impact estimated at Rs. 211 million.
The operation was conducted by teams of the FBR’s Intelligence and Investigation Directorate, Islamabad, in coordination with the Inland Revenue Enforcement Network. Acting upon credible information the teams raided the premises of Hunter Tobacco SMC Pvt. Ltd. located near Dharabi on Kallar Kahar Road, Chakwal, said a news release.
During the search, the enforcement teams found the premises being used for clandestine manufacture of cigarettes without the mandatory tax stamps under the Track and Trace System.
The manufacturing unit had also not been integrated with the Track and Trace System, which is a mandatory requirement for tobacco-sector manufacturers.
The operation resulted in the seizure of approximately 12, 600 kilograms of raw tobacco, sufficient for manufacturing around 630, 000 packets of cigarettes, besides filter rods, cigarette paper, aluminium foil, packaging material and other manufacturing inputs. The seized goods were shifted to a government warehouse and the premises were subsequently sealed.
The estimated revenue impact includes approximately Rs. 90 million in potential tax evasion that could have resulted from the sale of the cigarettes manufactured from the seized raw tobacco. The overall economic impact of Rs. 211 million also includes the estimated duty and taxes evaded on stock found at the premises and the value of machinery and other materials seized/sealed during the operation.
The FBR has reiterated that the manufacture and sale of cigarettes without payment of applicable duties and taxes, as well as non-compliance with the Track and Trace System, constitutes a serious violation of tax laws.
The board is taking strict enforcement measures to curb illicit manufacturing, protect legitimate businesses and safeguard government revenue.
Further legal action and criminal proceedings against the persons found involved in the illegal activity will be initiated upon completion of the ongoing investigation, in accordance with law.
The FBR has reaffirmed its commitment to intensifying enforcement against illicit tobacco manufacturing and other forms of tax evasion, while ensuring a level playing field for compliant taxpayers and legitimate businesses.
