Islamabad, October 18, 2023 – The Federal Board of Revenue (FBR) has taken a significant step to ease the process of claiming sales tax refunds for multiple tax periods.
On Wednesday, the FBR issued a notification outlining measures to facilitate taxpayers in claiming these refunds, addressing concerns related to the submission of Form-7A and the challenges faced by registered persons claiming non-export and/or input tax carry-forward based sales tax refunds.
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In accordance with rule 34 of the Sales Tax Rules, 2006, registered individuals or businesses seeking non-export and/or input tax carry-forward based sales tax refunds are mandated to file their claims through Form-7A when submitting their Sales Tax Returns. However, it has come to the FBR’s attention that Form-7A was not enabled, creating difficulties for registered persons looking to claim refunds under this rule.
Moreover, it was noted that non-export claims require a separate scrutiny process, which cannot be effectively processed alongside export-based claims through the FASTER system.
To address these issues and make it more convenient for registered individuals and businesses to claim their carry-forward based non-export related refunds, the Federal Board of Revenue is exercising its authority under section 55 of the Sales Tax Act, 1990.
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The FBR is now allowing the filing of carry-forward based non-export related refunds through two methods: RCPS at tax offices in the STARR system or through the Expeditious Refund System (ERS). This relief is available until June 30, 2024, or until Form 7A is made available online, whichever comes first.
The FBR has instructed field formations to promptly receive, process, and dispose of such refund claims in accordance with the law.
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This development is expected to be a significant relief for businesses and individuals, simplifying the process of obtaining sales tax refunds for multiple tax periods. By expanding the options for filing claims and streamlining the procedure, the FBR aims to enhance the ease of doing business and reduce the burden on taxpayers.
In conclusion, the Federal Board of Revenue’s decision to facilitate the submission of sales tax refund claims for multiple tax periods is a commendable move toward ensuring that taxpayers have a smoother and more efficient experience when seeking refunds. The relief provided through RCPS and ERS is set to make a positive impact on the business community and taxpayers, providing them with the support they need in the complex world of taxation.
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