ISLAMABAD: The Federal Board of Revenue’s Inland Revenue Enforcement Network (IREN) has seized three truckloads of cigarettes manufactured in Azad and Kashmir which were taken to Lahore. Sources in FBR revealed that the worth of non-duty paid cigarettes was Rs 30 million. FBR has exposed the nexus of AJ&K based cigarette manufacturer Walton Tobacco and M/S Numeric Distribution Network (Pvt) Ltd who were involved in the illegal trade of non-duty paid cigarettes to capture the market of cigarettes while offering the cheap price against the set price Performa by FBR and related institutions. According to sources, AJK-based cigarette manufacturers are willfully involved in illicit trade in Pakistan by dumping low priced/non-duty paid cigarette. Lahore-based Numeric Distribution Network is acting as conduit in the aforesaid scheme of tax fraud, adding that this company acts as a shield for AJ&K-based cigarette manufacturers and cartel involved in the trade of non-duty paid cigarettes whenever any AJK based cigarette is seized/detained. It was also learnt that this company while garbing of few original sales invoices, they try to justify all illicit sale of AJK-based cigarette in Pakistan. “Detention and seizure of 3 truckloads (840 cartons) carrying fake invoices has exposed the whole scheme of duty tax/fraud which is going on since last so many years,” sources revealed. In Pakistan, like rest of the world, the tobacco industry is highly prone to tax evasion. According to a recent study conducted, FBR is losing revenue over Rs 45 billion per annum and moreover this chunk of prevailing non-tax paid segment is expanding day by day. In order to forestall this menace FBR has constituted a special task force “Inland Revenue Enforcement Network” (IR-EN) against illicit trade of cigarette/tobacco. This network has launched a massive campaign against all segments of non-tax paid cigarettes/tobacco in Pakistan. During the aforesaid exercise it has been observed that huge quantity of low priced cigarette is being supplied & sold in Pakistan by AJK based Cigarette manufacturers. IR-En faced with the aforementioned inaction decided to combat the dumping menace on its own since 21st April, 2017 03 truckloads of AJK based low priced/illicit cigarette (manufactured by M/S Walton tobacco Mirpur, AJK) seized by cigarette squad ,RTO Rawalpindi. Post interception probe revealed, the ground check reports proved that in all the three cases, the invoiced buyers had fake particulars as declared business premises had no existence on the ground or if any was being used for some other purposes. During initial investigation by IR-EN personnel, the booked driver was associated with M/S numeric distribution networks PVT Ltd Lahore and he confirmed that the fake sales invoices were issued by Walton Tobacco, Mirpur AJ&K, which were to be deposited at warehouse located in Manga Mandi Lahore and then another set of invoices were issued by the warehouse management for onwards transportation. Thus practically sales invoices issued by AJK cigarette manufacture were only meant to defraud Pakistan tax authorities, sources added. Earlier also on 14th February, 2017 a joint cigarette squad of RTOs Sialkot and Rawalpindi had raided a premises at Sira-e-Alamgir and confiscated 1.24 million non tax paid cigarette sticks of AJ&K origin. M/S Numeric Distributions Network Pvt Ltd Lahore, had tried to rescue the trader while issuing an invoice as authorized distributor, sources revealed. It was also learnt that all the seized brands of AJ&K origin were being sold at a retail price which was ever lower than the amount of duty/taxes payable thereon. According to FBR officials, the minimum price itself constitution the evidence that no duty/taxes have been paid on such supplies moreover there is no mechanism for online verification of payment of duty /taxes on cigarettes being manufactured in AJK therefore for Pakistan tax authorities all AJK tax authorities and AJK council have been repeatedly requested for positive intervention but till date no meaning actions has been initiated in this regard. In the backdrop of the aforementioned eye-opening scenario, it becomes essentially vital for all the stakeholders in Pakistan and AJK to not only develop an understanding of the existing conditions involving illicit trade in cigarettes, but also take a consolidated and unanimous approach to play an effective role against this ever growing menace.