FBR seals illicit cigarette factory in Chakwal, estimates Rs211 million economic impact

The Federal Board of Revenue sealed a clandestine cigarette plant in Chakwal district and seized raw tobacco, unstamped cigarettes and machinery, with the operation estimated to have an overall economic impact of about Rs211 million, according to Business Recorder. Teams from the FBR's Intelligence & Investigation Directorate in Islamabad carried out the raid jointly with the Inland Revenue Enforcement Network. Credible information prompted the teams to search premises of Hunter Tobacco SMC Pvt Ltd near Dharabi on Kallar Kahar Road.

Officials found the site making cigarettes with no tax stamps, and it had never been connected to the Track & Trace System, a requirement for tobacco makers. About 12,600 kilograms of raw tobacco was taken, enough for roughly 630,000 packets, and cigarette paper, filter rods and aluminium foil were among the other inputs collected. The seized stock was moved to a government warehouse and the premises were then sealed.

The Rs211 million figure includes roughly Rs90 million in potential tax evasion from cigarettes that could have been made with the seized tobacco. It also adds duties and taxes on stock found at the site, plus the value of seized or sealed machinery and materials. The FBR called producing and marketing cigarettes without settling duties a serious tax law breach, and said criminal proceedings and further legal action will follow once the investigation is complete.