Karachi, January 4, 2024 – The Federal Board of Revenue (FBR) has taken a decisive step by announcing that it will reject refund claims of customs duty if filed after one year.
This development comes as part of the FBR’s efforts to streamline tax processes, and it is outlined in the updated Customs Act, 1969 for the tax year 2024.
According to the recent amendment, the FBR emphasizes that all refund claims related to customs duties or charges must be submitted within one year. The FBR’s stance is clear: no refunds for customs duties or charges, claimed to have been paid or overpaid due to inadvertence, error, or misconstruction, will be entertained if the claim is made beyond the one-year time frame from the date of payment.
In cases involving provisional payments made under section 81 of the Customs Act, 1969, the one-year period will be calculated from the date of the adjustment of duty after its final assessment. Additionally, for situations where a refund becomes due following a decision or judgment by any appropriate officer of Customs, the Board, the Appellate Tribunal, or the Court, the one-year timeframe will commence from the date of such decision or judgment.
The FBR has introduced a mechanism for the expeditious handling of refund claims filed under this section. The claim, subject to pre-audit, will be disposed of within a period not exceeding one hundred and twenty days from the date of filing. However, the Collector of Customs may, for reasons recorded in writing, extend this period for a maximum of ninety days.
Crucially, the updated Customs Act includes provisions to prevent refunds if the sanctioning authority determines that the incidence of customs duty and other levies has been passed on to the buyer or consumer. This safeguard ensures that refunds are not granted in cases where the burden of the duty has been transferred to end-users.
Furthermore, the FBR has been granted the authority, through a notification in the official Gazette, to specify the jurisdiction and powers of Customs officers for sanctioning refunds based on the amount of customs duty and other taxes involved.
This move by the FBR reflects a commitment to enhancing efficiency and transparency in the customs duty refund process. By imposing a strict one-year timeline for claims, the FBR aims to expedite the resolution of refund matters, reduce the backlog, and discourage delays in seeking rightful reimbursements.
Businesses and individuals involved in international trade are advised to stay abreast of these amendments to ensure compliance with the updated regulations. The FBR’s focus on timely submissions aligns with the broader efforts to modernize tax procedures and create a more responsive and accountable tax administration system in Pakistan.
