Karachi, December 17, 2023 – The Federal Board of Revenue (FBR) has provided comprehensive guidance on the filing and processing of sales tax refund claims for the tax year 2024.
This announcement comes with the issuance of updated Sales Tax Rules, 2006, shedding light on the procedures and requirements that businesses must adhere to when seeking refunds.
Under Rule 28 of the updated Sales Tax Rules, 2006, the FBR outlines the detailed process for filing and processing refund claims under sections 10 and 8B of the Sales Tax Act, 1990, starting from the tax period of July 2019 onwards.
According to the new rules:
1. Refund Claim Submission Process:
• For all refund claims under sections 10 and 8B of the Act, the data provided in the monthly return shall be considered as supporting data for the refund claim.
• The amount specified in column 29 of the return, as per the form STR-7, will be treated as the claimed amount for the purposes of the claim under section 10 of the Sales Tax Act, 1990.
• In the case of claims arising from zero-rated supplies, including exports, the claimant can submit the return without Annex H. However, Annex H must be filed separately, but not later than one hundred and twenty days from the submission of the return without Annex H. The date of Annex H submission is considered as the date of filing the refund claim.
• For commercial exporters, the claim must be filed within one hundred and twenty days after the submission of the return without Annex H or after the date of issuance of BCA (Bank Collection Advice), whichever is later.
• The Commissioner having jurisdiction may extend the one hundred and twenty days period to a maximum of sixty days if the claimant requests an extension and provides justified reasons for the delay.
• If a claimant is a registered commercial exporter dealing in same-state goods, the one hundred and eighty days period shall be reckoned from the date of filing the return or the date of issuance of BCA, whichever is later.
2. Document Maintenance and Submission:
• Registered persons claiming refunds must maintain all paper documents related to the refund claim, such as invoices, credit notes, debit notes, goods declarations, bank credit advice, and banking instruments in their office.
• These documents need not be submitted along with the refund claim to the Regional Tax Office or Large Taxpayers’ Unit. Instead, they should be presented to the respective offices upon request by the officer-in-charge for processing or post-refund scrutiny.
These guidelines aim to streamline the refund claim process, ensuring transparency and accountability while providing businesses with a clear framework for compliance. Businesses are urged to familiarize themselves with these rules to facilitate a smoother refund claim process and to maintain the necessary documentation for potential post-refund scrutiny by tax authorities.
