ISLAMABAD: Federal Board of Revenue (FBR) will issue sales tax and income tax refund bonds through its subsidiary company ‘FBR Refund Settlement Company (Private) Limited.
According to Finance Supplementary (Second Amendment) Act, 2019 the FBR Refund Settlement Company (Private) Limited will be incorporated under the Companies Ordinance, 1984, for the purpose of settlement of sales tax and income tax refund claims including payment by way of issuing refund bonds.
According to the Act, payment of refund through sales tax refunds bonds will be issued in following manner:
(1) The sales tax refunds under Sales Tax Act, 1990 may also be paid through FBR Refund Settlement Company (Private) Limited, in book entry form through an establishment licensed by the Securities and Exchange Commission of Pakistan (SECP) as a central depository under the Securities Act, 2015, in lieu of payment to be made through issuance of cheques or bank deposit advice.
(2) The FBR shall issue a promissory note to FBR Refund Settlement Company (Private) Limited, incorporating the details of refund claimants and the amount of refund determined as payable to each for issuance of sales tax refund bonds of the same amount.
(3) The bonds shall be issued in values of multiples of one hundred thousand rupees (Rs100,000).
(4) The bonds so issued shall have a maturity period of three years and shall bear annual simple profit at ten percent.
(5) The bonds shall be traded freely in the country’s secondary markets.
(6) The bonds shall be approved security for calculating the statutory liquidity reserves.
(7) The bonds shall be accepted by the banks as collateral.
(8) There shall be no compulsory deduction of Zakat against the bonds and Sahib-e-Nisab may pay Zakat voluntarily according to Shariah.
(9) After period of maturity, the company shall return the promissory note to the Board and the Board shall make the payment of amount due under the bonds, along with the profit due, to the bond holders.
(10) The bonds shall be redeemable in the manner as in the preceding sub-section before maturity only at the option of the Board along with simple profit payable at the time of redemption in the light of general or specific policy to be formulated by the Board.
(11) The refund under Sub-Section (1) shall be paid in the aforesaid manner to the claimants who opt for payment in such manner.
(12) The federal government may notify procedure to regulate the issuance, redemption and other matter relating to the bonds, as may be required.