Post refund divisions to be set up at RTOs/LTUs to audit claims

ISLAMABAD: Federal Board of Revenue (FBR) has decided to audit sales tax refunds by establishing ‘refund division’ at all Regional Tax Offices (RTOs) and Large Taxpayers Units (LTUs).

According to amended Sales Tax Rules, 2006 issued by the FBR the Rule 27 has been amended to establish Centralized Sales Tax Refund Office (CSTRO), Refund Division and posting of officers.

The FBR said that a CSTRO would be established under the Board for centralized payment of all refund amounts as due under the Act.

Further a Refund Division will be established, which will be headed by an officer, not below the rank of Assistant Commissioner, herein after referred to as officer-in-charge, duly supported by audit staff referred to as processing officers, to examine, process and settle the refund claims filed under these rules.

Further Post Refund Division in each RTO or LTU shall be established, which will be headed by an officer not below the rank of an Assistant Commissioner to audit the refund claims processed and sanctioned by the Refund Division.

The FBR said that that scrutiny of the refund claims processed or sanctioned after the June 30, 2014 shall be carried out on the basis of risk-based selection through computerized Post Refund Scrutiny (PRS):

Provided that where the Commissioner Inland Revenue has reasons to believe that a registered person, whose refund claim was processed or sanctioned, has been paid refund which was not admissible to him, he may direct through order in writing to conduct computerized Post Refund Scrutiny (PRS) of such claim.

Post refund audit of refund claims process through RMS will be the responsibility of the audit Divisions of respective RTO/LTU.

The registered person claiming refund under these rules shall maintain and keep all the paper documents relating to the refund claim, such as invoices, credit notes, debit notes, goods declarations, bank credit advice, etc. in his office.

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