FTO Wants Nationwide Audit, Gerry’s Dnata License Cancellation After Alleged Multibillion-Rupee Fraud

The Federal Tax Ombudsman (FTO) has urged the Federal Board of Revenue (FBR) to launch a three-year nationwide audit of all import and export sheds operated by M/s Gerry’s Dnata, following revelations of an alleged massive cargo fraud and duty-evasion scheme at Karachi’s Jinnah International Airport (JIAP). In an order issued Tuesday, the FTO directed the Member Customs (Operations) to instruct the Collector of Customs (Airports), JIAP, Karachi, to immediately begin proceedings to suspend the company’s cargo shed license, after serving a Show Cause Notice (SCN) to its CEO and providing a hearing. Upon completion of the audit and investigative proceedings, the license may be cancelled if charges are proven. The recommendations were issued under Sections 29 and 30 of the Federal Tax Ombudsman Ordinance, 2000. The FTO has also ordered the Collector of Customs to probe the role of Customs officials implicated in the alleged scam. After a fact-finding inquiry and hearing, the case is to be referred to FBR for disciplinary action under the E&D Rules, 2020. The investigation, initiated suo motu under Section 9(1) of the FTO Ordinance, stemmed from an October 2, 2025, news report alleging that a UAE-based cargo handler at JIAP had orchestrated the removal of high-value imported goods worth billions of rupees from Customs custody over the past 18 months. The scheme allegedly involved collusion with Customs personnel. At least six consignments of expensive electronics were removed from the shed since March 2024 without the payment of duties and taxes, using forged and fake Goods Declarations (GDs). Fraudsters reportedly reused machine numbers from previously cleared pharmaceutical GDs processed by another operator. Many of the importing companies involved were found to be bogus entities with falsified business credentials. The FTO noted that while Customs authorities have arrested several suspects and uncovered the fraud, the scale of the operation suggests that such activities were not possible without the active collusion of Customs staff posted at the shed. Gerry’s Dnata, as a licensed terminal operator under the Customs Act 1969 and Customs Rules 548-556E, is legally obligated to comply with all Customs procedures. The failure of the Customs Department to prevent repeated violations constitutes maladministration, the FTO said. A similar theft involving large quantities of mobile phones was reported previously, with no meaningful action taken against Customs officials. The FTO added that the ongoing pattern of unchecked theft, revenue loss, and lack of institutional response reflects a systemic breakdown of oversight, falling squarely within the definition of maladministration under Section 2(3)(i) and (ii) of the FTO Ordinance. ProPakistani has reached out to Gerry’s Dnata for comment and will update this story when a response is received.