The estimated sales tax amount evaded through the fraudulent use of flying invoices (irrelevant invoices) would be approximately Rs 5-6 trillion.
Sources told Republic policy that the use of fake/flying invoices to commit sales tax fraud has increased after facilitation, automation and easy ways to get sales tax registrations.
The quantum of sales tax fraud through the “flying invoices” has not decreased after automation. In the name of facilitation, now it is easy to get sales tax registration.
Fake invoices have been reduced due to system checks, but flying invoices have increased. Sources said that the estimated amount of sales tax evaded with the help of flying invoices comes to the tune of Rs 5-6 trillion.
Flying invoices have been used in different cases. There are cases where the input is wholly registered, but the output is un-registered within the supply chain. On the other hand, there are cases where the work is written, but the information needs to be.
Fake units are registered with the FBR to carry out paper transactions. The fraudsters file fake sales tax returns of dummy firms and claim illegal input tax against bogus invoices. The artificial/flying invoices have been used to assert inadmissible refunds/input tax adjustments, causing massive revenue loss to the national exchequer.